EURUSD Analysis: Bearish below resistance at 1.1225
Yesterday’s signals would have produced a losing long trade from the bullish outside candlestick on the hourly chart which rejected the support level identified at 1.1204.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be taken between 8am and 5pm London time today.
Short Trade
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1220 / 1.1225.
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
Go long following the next touch of 1.1030.
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 although there was a long-term bearish trend in this currency pair, it was not safe to trade with this trend until the price got established below 1.1200.
This made sense but despite breaking strongly below 1.1200 yesterday, the price quickly rose to invalidate the support / resistance at this area, so it didn’t work out.
The price chart below is now dominated by a new area of resistance at and just below 1.1225. This gives us a bearish technical picture in line with the slow but definite long-term bearish trend.
I would take a bearish bias today if the price rejects the resistance at 1.1200 with some bearish price action.
There is nothing important due today concerning either the EUR or the USD.