EURUSD: Bearish retracement from 3-month high price
Yesterday’s signals were not triggered, as there was no bullish price action when 1.1375 was reached.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only 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 1.1375.
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 bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1312.
Place the stop loss 1 pip below the local swing low.
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 due to the upwards movement, the outlook remained bullish on this pair for the day, but a deep bearish retracement which began suddenly would not surprise me at all.
I was ready to take a bullish bias if we get a pullback to 1.1375 and a firm bullish bounce there.
This was a great call as it reflected exactly what happened, the bullish trend suddenly broke with higher volatility. The former support at 1.1375 now looks like a (currently resistant) pivotal point, with the price well off the highs.
If the price can today get established above 1.1375 and begin using it as support again, I would take a bullish bias as we still have a longer-term bullish trend with possible residual momentum. However, if the price stays below 1.1375 all day, that will be a bearish sign that an increasing pullback is likely.
There is nothing of high importance due today regarding the EUR. Concerning the USD, there will be a release of Core Durable Goods Orders data at 1:30pm London time.