EURUSD: Bearish retracement from 3-month high price continues
Yesterday’s signals were not triggered as there was no bearish price action at 1.1375.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today only.
Short Trade
Go short following upon the next touch of 1.1477.
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 Trade
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1312.
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 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
I wrote yesterday that if the price could 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 stayed below 1.1375 all day, that would be a bearish sign that an increasing pullback was likely. This was a relatively good call as the price was not able to get established above 1.1375 although it did spend a little while above that level, so overall it is logical that the price did not move much – this level was a good benchmark to watch yesterday.
The picture now is a little more bearish as the price has not rallied yet and the short-term picture suggests the price is going to be trading below the 1.1350 soon. This could see a move down to test the nearest support level at 1.1311. I would take a bullish bias if we get a drop to that level and a firm bullish bounce between 9am and Noon London time today, as we still have a long-term bullish trend liable to reassert itself.
There is nothing of high importance due today regarding the EUR. Concerning the USD, there will be a release of Final GDP data at 1:30pm London time.