We mentioned a potential bearish harami candlestick pattern that formed on June 6 and June 7 at the key resistance level of 1.3300. It was an important warning sign as the Eastern candlestick pattern formed right at the Western resistance area. But that pattern ended up with no confirmation from subsequent trading sessions. On June 10, a bullish candlestick engulfed the prior session’s (June 7) small bearish candlestick body. The candlesticks of June 10, June 11, and June 12 together formed an advance block pattern, in which the three candlesticks had progressively smaller real bodies, indicating a weakening upside drive. (Note: the candlestick of June 12 was less bearish as it had a relative long lower shadow showing support at the session low of 1.3265.)
On June 13 (Thursday), we had a potential hanging man pattern variation formed at 1.3390, very close to the round level of 1.3400. Ideally, the hanging man’s lower shadow should be two or three times the height of the real body. In addition, to be a valid pattern, it requires bearish confirmation with the next session’s close under the hanging man’s real body. If today’s (Friday’s) close is below 1.3335/1.3300, it may strengthen the downside momentum. The RSI on the daily chart is turning down from 70 and the MACD is bullish.
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