Reversal Candlesticks on EUR/USD (September 10, 2013)

The euro’s rallies against the dollar might soon be coming to an end, as reversal candlesticks on the 4-hour time frame are hinting at an exhaustion. At the same time, stochastic has already reached the overbought zone, suggesting that bears could take over.

The 1.3250 minor psychological level is in between the 50% and 38.2% Fibonacci retracement levels and is in line with a former support level. This could act as strong resistance from now on, due to the confluence of levels.

Shorting at 1.3250 with a stop above the 61.8% Fib and a target of the previous lows around 1.3125 would yield a 2:1 reward to risk.

By Kate Curtis from Trader’s Way