EUR/USD Price Analysis: Tuesday’s Doji makes Wednesday’s close pivotal
- EUR/USD's immediate bearish bias stands neutralized after Tuesday's Doji.
- A close above Tuesday's high is needed to revive the broader bull trend.
EUR/USD created a classic Doji candle with a relatively long upper shadow on Tuesday, indicating indecision in the market place and making Wednesday’s UTC close pivotal.
A Doji candle with a relatively long upper wick occurs when bulls fail to keep prices at daily highs. On Tuesday, the currency pair faced rejection at 1.1808 and ended on a flat note, as a sharp pullback in gold helped the dollar remain bid against major currencies.
The candle’s effect depends on the context. If the pattern appears following a sell-off, it is considered as a sign of impending bullish reversal. On the other hand, if it appears at market tops, it is taken to represent an impending bearish reversal.
In this case, it has appeared during a bull market pullback. As such, the immediate outlook stands neutralized.
If the pair ends Wednesday below Tuesday’s low of 1.1722, a bearish Doji continuation pattern would be confirmed. In other words, it would imply a continuation of the pullback from the Aug. 6 high of 1.1916.
Meanwhile, a close above Tuesday’s high of 1.1808 would imply an end of the pullback and revival of the broader bull trend.
Daily chart
Trend: Neutral