EUR/USD Signal Update
Yesterday’s signals expired without being triggered as the price never reached either 1.3975 or 1.3825.
Today’s EUR/USD Signals
Risk 0.50%.
Entry must be made between 8am and 5pm London time today.
Long Trade
Enter long following a next bar break of any bullish pin or engulfing hourly candle forming after the first touch of 1.3825. From two hours following the close of the first hourly candle that closes below 1.3825, this trade is invalidated.
Place the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even when the price is 20 pips in profit. Remove 75% of the position as profit at 1.3890, and leave the remaining 25% to run
Short Trade
Enter short following a next bar break of any bearish pin or engulfing hourly candle forming after the first touch of 1.3975. From two hours following the close of the first hourly candle that closes above 1.3975, this trade is invalidated.
Place the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even when the price reaches 1.3925. Remove 50% of the position as profit at this point, another 25% at 1.3860, and leave the remaining 25% to run.
EUR/USD Analysis
Yesterday printed a bullish inside candle. In spite of the fact that we are well within a very bullish channel, and that there is still some bullish momentum that has not been broken, it is very hard for this pair to break beyond the upper channel ascending trend line which now sits at 1.3936. As we have no major news today before the very important FOMC an hour after London closes, it seems unlikely that we are going to get a major break or falling off from this price area before then, and that what will happen will be driven largely by the data.
Speaking purely technically, it looks as if the bullish movement has run out of steam and as if we are about to fall down to at least 1.3855 approximately, and possibly lower than that.
There is excellent support at 1.3825 which is confluent with a retest of the broken long-term bearish trend line and today’s GMT daily S3 pivot point.
Above us we still have resistance at 1.3955, which is confluent with the very major 50% Fibonacci retracement level, and 1.3975 beyond that. As we already used 1.3955 a few days ago, I will wait until 1.3975 to look for a short.
If the FOMC news is USD-negative, we may get a spike up beyond 1.3975. It is possible that 1.4000 could act as a barrier above that, but beyond there it looks clear up to 1.4245, so it is hard to pinpoint any likely turning points within that area. My colleague Christopher Lewis also sees a lot of potential upside.
There are no high-impact economic data releases concerning either the EUR or the USD during today’s London session. However afterwards, at 6pm London time, the FOMC statement and projections will be released, which may be a major market event. It can be expected that this pair will be fairly quiet before that time.