Yesterday’s signals were not triggered as the bearish price action took place well above 1.1680 but just a few pips short of 1.1715.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today only.
Long Trade 1
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1615.
- Put the stop loss 1 pip below the local swing low.
- Adjust the stop loss to break even once the trade is 20 pips in profit.
- Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
Short Trades
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1680, 1.1715 or 1.1749.
- Put the stop loss 1 pip above the local swing high.
- Adjust the stop loss to break even once the trade is 20 pips in profit.
- Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
EUR/USD Analysis
Yesterday, this pair made a strong upwards move, peaking just a couple of pips below the inflective 2-year high – a very significant level – at 1.1715. As the price retreated so quickly, I still see 1.1680 as potentially effective resistance, even though the price far exceeded it. There is no doubt that this is one of the most strongly trending currency pairs, and that there is a well-established bullish trend. However, with a major U.S. data release due later today, and the near-touch of such a major price extreme, there is a small but significant chance that we may have just printed a very long-term high. The price action on the daily chart is definitely suggestive that the next short-term move will be downwards, although the release due later could push the price anywhere, depending upon its content.
There is nothing due today concerning the EUR. Regarding the USD, there will be a release of Crude Oil Inventories data at 3pm London time, followed by the FOMC Statement and Federal Funds Rate at 7pm.