Last Saturday, I showed you the hammer candlestick formation on daily chart as a warning of a potential upside correction. The fact was price attempted to push higher, topped at 1.3838 but whipsawed to the downside, bottomed at 1.3531 and closed at 1.3617, not so far away from the opening price on Monday at 1.3665. Yesterday, we had another hammer on daily chart, which is for me suggesting the same thing: potential upside correction. Actually, hammer is a bullish reversal pattern, but this time I don’t believe that these hammers would trigger a bullish reversal since the fundamental of the Euro zone doesn’t support such conclusion.
The EU rescue plan to help Greek to solve debt and deficit problem in Brussels failed to come up with satisfying detail and disappointing Euro zone GDP data yesterday could keep the Euro under pressure next week with potential nearest technical target at 1.3490 – 1.3400 area. However, like I said last Saturday, I will not ignore any potential upside correction warning as it helps me to manage my risk. Resistance is seen around 1.3750 – 1.3850 area. Break above that area could trigger further bullish correction towards 1.4030 area but as long as price still move inside the bearish channel and no significant positive news from the Euro zone, I still prefer a bearish scenario.
Have a great weekend and see you guys next week