EURUSD: Bearish trend below 1.1117
Last Thursday’s signals were not triggered, as there was no bullish price action when 1.1117 was hit.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered before 5pm London time today.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1117 or 1.1163.
- 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 Idea
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1030.
- 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 last Thursday that the technical picture had become more bearish as we have had the breakdown (below 1.1163), with the Euro weakening. Although it had been very slow and reluctant to break down, there was certainly a long-term bearish trend, so the current price movement was with trend.
I was looking to take a bearish bias from a solid bearish reversal following a bullish retracement to the nearest resistance level at 1.1163. Unfortunately, the price did not quite complete the retracement to that level.
The picture has become more bearish still, with the price breaking below the former support at 1.1117 and making new lows below 1.1100. The price is now approaching long-term lows and the price action on all time frames looks bearish.
It is interesting how the Euro has become very bearish while the British Pound has become much more bullish, suggesting that some of what we are seeing is an unwinding of the “hard Brexit” trade long EUR/GBP.
I would take a bearish bias on this pair if we get a bearish reversal later following a retracement to the resistance at 1.1117.
There is nothing of high importance due today concerning either the EUR or the USD.