EUR/GBP Price Analysis: Piercing Line candlestick pattern signals short-term reversal after lows

📆 6/17/2024 12:36 PM
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Technical Analysis

EUR/GBP has sold-off steeply since breaking out of a range-bound consolidation it was trading in for most of the start of the year.

EUR/GBP sold off to just below 0.8400 as its downtrend unfolds. It has formed a bullish Piercing Line Japanese candlestick reversal pattern indicating the potential for a correction higher. The pair is in an overall downtrend, however, indicating more downside will probably eventually materialize. EUR/GBP Daily Chart After touching a low at 0.8398 on June 1 4 it reversed and started rising, forming a Japanese Piercing Line candlestick reversal pattern in the process .

The Piercing Line has been followed by a green up day today and if it closes positive then it will provide added bullish confirmation of the reversal. The pattern suggests a short-term reversal but not a reversal of the trend. It could mean EUR/GBP is about to correct higher. The trend, both on a short, intermediate and long-term basis is bearish on balance.

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EUR/GBP IG Client Sentiment: Our data shows traders are now at their most net-long EUR/GBP since May 24 when EUR/GBP traded near 0.85.Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger EUR/GBP-bearish contrarian trading bias.
Source: DailyFX - 🏆 305. / 63 Read more »