The EURUSD currency pair on the Daily Chart has been following an upward path since 20 February 2020, having found support at the 1.10779 level.
The formation of the Japanese candlestick reversal pattern known as Bullish Engulfing signalled the very beginning of the upward bias.
The low prices attracted buyers who entered the market with long positions and as a result they have pulled the Euro to higher levels.
Subsequently, the currency pair formed an Evening Star pattern near the resistance level of 1.14964, which hinted at the end of the rally and the potential beginning of a decline.
Upon applying Technical analysis on the price chart, one can see that the last Japanese candlestick of Evening Star pattern managed to close below the 10-period Exponential Moving Average line, a sign that points to the downward direction and the bearish bias in the market.
Additionally, the Relative Strength Index Oscillator registers values below the fifty line, which also confirms the negative sentiment in the market.
Both technical indicators, as well as the Japanese candlestick reversal pattern, are in agreement in terms of the pair’s downward bias.
Furthermore, the current price is trading below the upward trend line, which also implies that supply is greater than demand.
Applying the Fibonacci Retracement tool to the low price of the Bearish Japanese candlestick at the price of 1.09550 and dragging it up to the high price of the pattern at the price of 1.12364, three price targets were calculated – the first price target is estimated at 1.06736 (200%), the second price target is seen at 1.03922 (300%), and the third price target is projected at 1.01108 (400%).
Of course, it remains to be seen whether the crowd psychology as well as sellers’ pressure will be able to continue taking control over the market and drive the EURUSD pair lower
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