Yesterday’s signals produced a profitable short trade from the bearish pin candlestick which rejected the resistance level identified at 1.1277.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be entered before 5pm London time today only.
Short Trades
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1277 or 1.1325.
- 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.
- Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
Long Trades
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1225 or 1.1220.
- 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.
- Remove 50% of the position asprofit 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
I wrote yesterday that the technical picture was now more bullish as although we had a long-term bearish trend, we just had a 30-day high close and a bullish break above former resistance at 1.1225 which was quite significant. I thought that the price now would probably consolidate around 1.1250 but may well then resume its advance – but probably not today.
This was a good call as the price was effectively held yesterday by both resistance and support nearby and effectively consolidated around 1.1250. However, the short-term momentum is bullish again and the U.S. Dollar continues to be weak. The signs all point to higher prices today, so we are likely to get a test of the resistance again at 1.1277 which should be today’s pivotal point. If the price can get established above that level, it would be a bullish sign.
There is nothing important due today concerning the EUR. Regarding the USD, there will be a release of ISM Non-Manufacturing PMI data at 3pm London time.