EUR/USD jumped 0.73% on Friday, engulfing the preceding day’s high and low and forming a bullish outside day candle on the daily chart.
If appearing after a prolonged or notable sell-off, the bullish outside day is considered an early warning of a reversal higher. However, the trend change is confirmed if the follow-through is positive, that is, an asset ends the following day above the outside day’s high.
In other words, the pair needs to end Monday above Friday’s high of 1.2050 to confirm a bearish-to-bullish trend change. The immediate bias is neutral, with the pair trading near 1.2045.
A close under Friday’s low of 1.1952 would imply a continuation of the sell-off from the high of 1.2349.
Daily chart
Trend: Neutral
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