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EUR/GBP: Bearish engulfing candle closing at flipped support

EagleFX

EUR/GBP produced a bearish engulfing candle yesterday. The candle closed within a level, where the price reacted earlier. Thus, it may work as a level of support. However, an engulfing candle always has an impact on intraday charts. Thus, intraday traders may look to go short in the pair and drive the price towards the South. Let us now have a look at three key charts.

Chart 1 EUR/GBP Daily Chart


The chart shows that the price had a strong rejection at the level of 0.91530 and produced a bearish engulfing candle. The price reacted at the level earlier. Thus, the sellers may wait for the price to consolidate and produce a bearish reversal candle to go short in the pair. The price may find its next support around the level of 0.88600. On the other hand, if the price makes a bullish breakout at 0.91530, the price may find its next resistance around 0.94000.

Chart 2 EUR/GBP H4 Chart


The chart shows that the price made a strong bearish move and made a breakout at the level of 0.90900. The price seems to have found its support around 0.90550 and produced a bullish inside bar. It has been heading towards the breakout level. If the level produces a bearish reversal candle, the sellers may go short in the pair below the level of 0.90550 and drive the price towards the South further. The price may find its next support around 0.90000. If the price makes a bullish breakout at 0.90550, it may head towards the North and find its next resistance around 0.91000.

Chart 3 EUR/GBP H1 Chart


The chart shows that the price made a strong bearish move and had a bounce at the level of 0.90580. Upon producing a bullish engulfing candle, the price has been heading towards the North. The level of 0.90785 may work as a level of resistance. If it produces a bearish reversal candle, the sellers may go short in the pair below 0.90580. The price may find its next support at 0.90215. On the contrary, if the price breaches the level of 0.90785, the price may head towards the North and find its next resistance around 0.90975.

Considering these three charts, it seems that the pair may make a bearish move. However, the daily chart’s support may change the equation, though. Thus, intraday charts and intraday breakout at the lowest low in the intraday charts are going to play a significant role in determining its next route.

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