Euro reverses above Asian session highs

Despite morning star formation eur/usd pair went above Asian session highs and reversed. A tiny pin formed on 15 minute chart indicating some selling pressure coming near 200 ema, but that was not very strong signal to sell so I did not take any action on that. 

You may also see that Euro is not exactly going down below today’s low. If it stays above 1.1060 level throughout European session and forms a reversal pattern I might attempt a small long around 1.1070 level with a stop below 1.1050. 

The technical picture is not that clear with Euro as it is with British Pound, which is soaring on positive UK CPI data. We will probably have to wait for news from US to see whether rate hike is contemplated in the heads of FED guys or not. 

If not, not only Pound, but Euro also will rise versus US dollar. Next level of resistance for Euro is 1.1100 area. We have even number there and 200 sma on 15 minute chart. These should stall any Euro advance for today. 

Intra day trend is slightly bullish if above 1.1050. Pound/US dollar pair is clearly a better instrument for day trading this week. 

Euro reverses above Asian highs

Morning star on eurusd 1 hour chart

After a break of yesterday’s low and some consolidation eur/usd formed a morning star pattern and is rising now. I may remind you that it is a bullish candle pattern formation that indicates bullish pressure and may serve as a signal to go long. 

The pattern should be taken even more seriously as it formed right on 200 ema on 1 hour. You see, we wait for more points of confluence in order to take a signal. Just the mere fact that it is on 200 ema or sma is not enough to go long or short. You need more factors and the second one is morning start candle pattern. 

The first level of resistance is even number of 1.1100 that coincides with 200 sma on 15 minute chart. The next much stronger resistance level is yesterday’s high: 1.1125 level. 

On the other hand we should remember that the pair has been going down since last Thursday when it formed a peak at 1.1213 level. 

We should also remember that long term trend has been down for a year now. Intermediate trend is neutral and short term trend is down. Yet day traders can trade both directions when key points of intra day support or resistance are reached. 

Morning Star candle pattern on 1 hour chart in eur/usd