April 20 (Reuters) - After an eight-day rally, EUR/USD is showing early bearish signals, including a moving-average death cross.

That warning is reinforced by Friday's long upper candlestick shadow and Monday's break below the top of the daily Ichimoku cloud. Together, these suggest the recent uptrend is losing momentum and may be close to reversing.

Still, the evidence is not yet decisive. By the close of Monday's session, some of these signals could weaken or lose significance.

A death cross occurs when a shorter-term moving average falls below a longer-term one, typically the 50-day SMA dropping under the 200-day SMA. It is generally seen as a bearish signal, pointing to fading momentum and the risk of a broader reversal. In EUR/USD, the 50-day SMA first crossed below the 100-day SMA on April 7, yet the pair continued rising to 1.1849 (EBS pricing) before easing back. On April 17, the 50-day SMA moved below the 200-day SMA, forming a death cross. However, both averages — especially the 200-day — are largely flat, which reduces the signal's strength.

Friday's shooting-star candle also hinted at a reversal. But Monday's long lower shadow may dilute that signal, leaving the bearish case still unconfirmed. A shooting star is a candlestick with a long upper shadow and little or no lower shadow, and a small real body (shaded area between the open and close) near the session lows that arises in an up-trend.

EUR/USD also dropped below the daily Ichimoku cloud top on Monday, another bear signal, but a rebound back above the 1.1746 line suggests that EUR bulls are still active. A close above the cloud would further weaken the reversal risks.
EUR/USD daily chart:


(Peter Stoneham is a Reuters market analyst. The views expressed are his own)