- EUR/USD has produced a doji candle on the 4-hour chart, stalling the recovery rally.
- A weekly close above 1.0864 is needed to confirm a bullish reversal.
EUR/USD closed 0.25% higher on Tuesday, having eked out gains in the previous two trading days.
The single currency has printed a three-day winning streak for the first time since the end of December.
At press time, the pair is trading at 1.0876. A doji candle has emerged on the 4-hour chart. The pattern indicates indecision and has weakened the case for a continuation of the recovery rally.
If the pair finds acceptance under 1.0872 (the low of the doji candle), a bearish doji reversal would be confirmed. That will likely invite stronger selling pressure, pushing the pair lower to 1.0825 (4H 50-MA).
Alternatively, a break above 1.0890 would invalidate the doji candle and strengthen the odds of a move to 1.8026 (4H chart resistance).
Focus on the weekly close
While the pair has recovered from 1.0778 to 1.0890 in the last three days, a bullish reversal is still not confirmed.
A weekly close above 1.0864 is needed to validate last week’s hammer candle and confirm a bearish-to-bullish trend change.