Is EURPLN Poised for a Rebound? Hammer Pattern Signals Key Shift

By Tomasz Wisniewski|

Published: November 24 2023, 07:44 GMT+0

Is EURPLN Poised for a Rebound? Hammer Pattern Signals Key Shift

In revisiting our Monday analysis of EURPLN, a notable development demands attention. Earlier this week, we discussed the pair reaching new long-term lows and breaching crucial supports – both a key horizontal level and a dynamic, long-term uptrend line. However, Friday’s market activity brings an intriguing twist to this narrative.

As we examine the current situation, it’s apparent that the earlier breakout attempt has faced a significant rejection. Now, we’re possibly witnessing a rebound, although it’s prudent to wait for the closure of today’s trading session for confirmation. The emerging pattern is particularly noteworthy – a hammer formation is taking shape on the weekly chart, marked in yellow for clarity. This hammer, characterized by its small upper body and extended lower tail, is positioned precisely at the long-term uptrend line and marginally below the critical horizontal resistance at 4.4.

This development, while intriguing, does not yet constitute a definitive buy signal. It serves more as a precursor or an initial step towards a potential bullish reversal. For a robust buy signal to materialize, we would need to see the formation of a bullish candle in the upcoming week, one that not only emerges but also closes above the pivotal blue area. Such a move would solidify the reversal indication and present a more compelling case for buyers.

Given these unfolding events, EURPLN will undoubtedly be a pair to watch closely in the week ahead, as it teeters on the edge of a potentially significant shift in market sentiment.