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  • EUR/USD is trading in a sideways manner near 1.1915 on Wednesday. 
  • Tuesday’s bearish pin bar indicates uptrend exhaustion and scope for a pullback. 

EUR/USD could see a notable pullback in the short-term as the daily chart shows signs of uptrend exhaustion. 

On Monday, the pair faced rejection above 1.20 and closed in the red at 1.1911, forming a bearish pin bar or inverted hammer candlestick pattern. The long upper wick attached to such candles signifies buyer fatigue. It is considered an early warning of an impending trend reversal lower – more so, in cases where the candlestick appears following a notable rally and at multi-month/year highs. 

The EUR/USD has carved out the bearish pin bar following a rally from 1.08 to 1.20 and at the highest level since May 2018. 

As such, a re-test of the support near 1.1750 looks likely. A daily close above 1.20 is needed to invalidate the bearish pin bar pattern. 

Daily chart

Trend: Bearish

Technical levels

 

Expert score

5

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