EURUSD: Closes Higher On Shooting Star Candle Formation
EURUSD - With a loss of upside momentum and its subsequent collapse through a layer of key supports seen EUR testing a low of 1.4827 level the past week before closing higher on Friday at 1.4986, we are now faced with two scenarios. One is the shooting star candle pattern formed on the weekly chart which is a top reversal signal but requires a follow-through for confirmation. The second, is its rejection candle printed on the daily chart following a reversal of its of intra day weakness from the 1.4827 level on Friday. In order to neutralize the efficacy of its weekly shooting star candle, a decisive break and hold above the 1.5062 level, its Oct 26'09 high and the 1.5143 level, its YTD high must occur. That should propel the pair further higher towards the 1.5283 level, its May 04'08 low and even higher. However, if a follow-through to the downside occurs on the back of the mentioned shooting star candle' the initial downside risk will open towards the 1.4869 level, its LT rising trendline with a break turning focus to its Nov 20'09 low at 1.4799.Below there will extend losses towards its Nov 03'09 low at 1.4625 where a cap is expected. Although EUR remains vulnerable to the downside, as long as it holds above its LR rising trendline, its medium term uptrend remains intact.