EURUSD: Bearish breakdown to new 2-year low price
Yesterday’s signals were not triggered, as none of the key levels were reached yet.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today only.
Short Trade Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1104.
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 Idea
Go long following a bullish price action reversal immediately upon the next touch of 1.1030.
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 noted yesterday that there were very important U.S. data releases due later which could push the price up heavily or produce a strong long-term bearish breakout below 1.1100. It was the second scenario which played out, with the U.S. Dollar strengthening almost everywhere despite the Fed making its first rate cut in a decade, reducing its rate by the expected 0.25%, because the Chair of the Fed ruled out a prolonged easing cycle.
Technically, we have a dramatic development here: finally, a break down below 1.1100 to a new 2-year low price. The price has already got very close to the nearest key support level at 1.1030, which will almost certainly be today’s pivotal point.
This is a very bearish development, with a darkening fundamental picture for the Eurozone plus the potential impact on top of that of a no deal Brexit in October.
I would take a bearish bias if the price is below 1.1025 at 9am or 10am London time. However, traders should be careful of a bounce at 1.1000, but below that the price has plenty of room to fall further.
There is nothing of high importance due today concerning the EUR. Regarding the USD, there will be a release of ISM Manufacturing PMI data at 3pm London time.