EUR / USD was up 0.73% on Friday, engulfing the previous day’s highs and lows and forming a bullish outer candle on the daily chart.
If this pattern appears after a prolonged or noticeable selloff, the bullish outer day is considered an early warning of an upside turn. However, the change in trend is confirmed if the follow-up is positive, that is, the pair ends the next day above the high of the outer day.
In other words, the pair must end on Monday above Friday’s high of 1.2050 to confirm a change from downtrend to bullish. The immediate bias is neutral, with the pair trading near 1.2035 at time of writing.
A close below Friday’s low of 1.1952 would imply a continuation of the selloff from the high of 1.2349.
EUR / USD daily chart
EUR / USD technical levels
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