Forex Technical Update
A Marabuzo candle is one without a tail. For example a bullish marabuzo is one where the open is equal to the low, and the close is equal to the high. This type of candle stick suggests bulls were dominant in that candlestick period. If the candle is also very strong relative to recent candles, it suggests either a very bullish intent.
- The EUR/USD started the week in a bearish correction mode as it was to end Friday. It even started by falling through a gap.
- However, the market was supported at 1.4350, near 50% retracement of Friday's counter-trend breakout rally.
- The market rallied from 1.4350 with essentially a marabuzo that engulfed all of the week's opening candles, as well as some of Friday's.
- As I write this update, another strong bullish candle is attacking Friday's high near 1.4450.
- The bullish scenario above 1.4450 is the test of the 1.45-1.4517 high
- The daily chart shows the resistance pivots at 1.4555, 1.4695 and 1.4940 as short to medium term targets for the bullish scenario.
- You see that reaching 1.4555 adds a breakout from a declining trendline and further suggests the case for the bullish scenario.
- After such a strong rejection at 1.4350, the bullish scenario is very strong unless something causes the bears to push price back below this level..
- The EUR is also very strong at the moment against the GBP and JPY, but is in a narrow range with the CHF.
Subscribe and become a member to share your views and join live discussions as well as webinars about the markets.
Fan Yang CMT
Chief Technical Strategist