Yesterday’s signals were not triggered, as none of the key levels were reached before 5pm London time.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be entered before 5pm London time today.
Short Trade
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1227.
- Place the stop loss 1 pip above the local swing high.
- Move 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 ride.
Long Trade
- Long entry following a strong bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1150.
- Place the stop loss 1 pip above the local swing high.
- Move 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 ride.
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
I wrote yesterday that the invalidation of all the support above 1.1150 and the printing of new lower resistance at 1.1227 which had been carved out by recent price action did suggest that the price was set to fall further. I was ready to take a bearish bias if the price could trade below the lower trend line for a couple of consecutive hours. This was a good call on both counts, with the price making a new 18-month low below the support at 1.1150.
There is a long-term bearish trend and no significant support levels between 1.1150 and 1.1030 so the price might fall much further today. The Dollar is strong, and the Euro is one of the weakest currencies. The odds are that we are going to see still lower prices over the course of today, so be extremely careful in trying to take a long trade from 1.1150. I would take a bearish bias on this currency pair today if the price is below 1.1150 at 9am London time.
There is nothing important due today concerning the EUR. Regarding the USD, there will be a release of Core Durable Goods Orders at 1:30pm London time.