I remain bearish on USD, but as these things rarely move in a straight line (and considering the past 6 straight days moving lower) – I’m expecting a small bounce. Welcome our ol friend “the hammer”.
Definition of ‘Hammer’
A price pattern in candlestick charting that occurs when a security trades significantly lower than its opening, but rallies later in the day to close either above or close to its opening price. This pattern forms a hammer-shaped candlestick.
This candlestick pattern is not the “end all be all” of trend change – but does suggest that buyers have stepped in and “bearish price action” may take a short break. When looking at this candle formation in light of the current down trend in USD – I would consider a small bounce over the next couple days at best – before the downtrend once again resumes.
The past few days trading has been fantastic with the short USD trades, as well ther long JPY’s paying well. I will likely sit a day here and re evaluate but as it stands – USD should continue lower, and the short term bottom in JPY – looks pretty good to me.
Hmm the second red candle also looked like a hammer…. No luck so far with the yen longs. Still struggling.