EUR/USD Signal Update
Yesterday’s signal was not triggered and expired.
Today’s EUR/USD Signals
Risk 0.25% on each/any triggered trade.
Entry should be made before 5pm London time today only.
Long Trade 1
Enter a long limit order at 1.3655 for a touch trade. Place the stop loss at 1.3612. Take 75% of the position as profit at 1.3695 and leave the remainder to ride.
Long Trade 2
Enter long at the next bar break of an hourly pin or strong engulfing or outside bar rejecting and closing above the support level of 1.3695. If this level is not touched and rejected by the same hourly bar, or if an hourly bar closes more than a few pips below this level, the trade is immediately invalidated and should not be taken.
Stop loss at the local swing low or 1.3662, depending upon how close the entry is to 1.3695. If the entry is very close, then the lower of the two should definitely be used.
Take profit on 75% of the position at 1.3733 and tighten the stop by using a trailing stop of 40 pips. Let the rest of the position ride and take half of the remainder as profit at 1.3793.
Short Trade 1
Enter a short limit order at 1.3830 for a touch trade. Place the stop loss at 1.3870. Take 60% of the position as profit at 1.3793 and leave the remainder to ride.
EUR/USD Analysis
There is no major news expected today, so it will probably be a slow and quiet day.
The uptrend continued yesterday, we are now not far off the 2-year high of 1.3830 that was made in October. We again made a higher daily high and low yesterday. The area around 1.3830 was previously very distributive and preceded a sharp fall, so it is logical to be nervous about the uptrend as we reach this level again. We also hit the inner upper channel trend line yesterday from which the price fell relatively quickly (see the chart below).
The uptrend remains technically healthy and we have not breached the minor resistance levels turned into minor support levels at 1.3725 and 1.3692.
Due the confluence of the upper trend line today with the support turned resistance zone from 1.3830 to 1.3860, and the 61.8% Fibonacci retracement level from the 2011-12 major downwards move, I am comfortable with a touch trade short at that level with a stop 10 pips beyond that zone, anticipating a possible spike up there. These levels are also quite confluent with the R2 and R3 daily pivot points.
There is however no reason to be afraid of taking long trades, I have targeted the current weekly low and the support level around 1.3650 which is still quite confluent with the broken and retested trend line marked in pink on the chart below:
