Euro/Dollar Spotlight: Indicator of the Day

“INDICATOR OF THE DAY” - DRAGONFLY DOJI
[I][B]The Euro has rallied quite impressively thus far after initially breaking down to fresh 2009 lows by 1.2455 overnight. The pair now trades back near opening levels with a close by 1.2560 to set up a bullish reversal signal in the form of a “dragonfly doji” candle formation.


[/B][/I]
A "dragonfly doji" is a candle setup that occurs at the end of trend and often results in some form of a bottom. For this set-up to occur, the market will trade significantly lower right from the open, before eventually recovering to close all the way back by opening levels. From a price action perspective, this translates into a market that wanted to continue in the direction of the trend but in the end, could not succeed in its attempts. The picture above is a snapshot of the daily Euro chart taken into the US open. While we still have a lot of trade to go before the daily close at 5pm EST, we thought that the potential set-up was worth highlighting, even if for educational purposes. However, should we close at or near 1.2560, we most definitely will be looking for some upside into Thursday Friday.

Written by Joel Kruger, Technical Currency Analyst for DailyFX.com
If you wish to receive Joel’s reports in a more timely fashion, e-mail
[email protected] and you will be added to the “distribution” list.

Joel Kruger publishes 6 daily pieces:

“Tech Talk” – A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)

“Morning Slices” – Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes “Trade of the Day”).
Monday-Friday (between 6:30am-7:30am EST)

“Indicator of the Day”A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)

“Cross Country” – A Midday Fundamental Update, along with Technical Analysis of Selected Cross Rates.
Monday-Friday (between 10:30am-11:30am EST)

“Scandi Daily” A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact [email protected] if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)

“Daily Classical” – A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)