EURUSD: Weakly bearish below 1.1018
Yesterday’s signals may have produced a losing long trade from 1.1018, although I recommended it made more sense to be bullish only above 1.1039 which was never breached, and in fact came very close to capping the high of the day.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered prior to 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 1.1018, 1.1039, or 1.1056.
⦁ Put 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.
⦁ Remove 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 Ideas
⦁ Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.0993, 1.0966, or 1.0941.
⦁ Put 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.
⦁ Remove 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 it would make sense to be more bullish above 1.1039 and more bearish below 1.1018 or perhaps 1.0993 would be even better, but there were likely to be better trading opportunities in the other major currency pairs over the day, such as USD/JPY and GBP/USD.
This was a good call, as the price made its daily high just a pip or so below 1.1039 and broke bearishly below 1.1018 and now seems to be using that level as new lower resistance in classic stairstep style.
The pace of the descent is slow, so can only call it a weak bearish trend. However, it can be argued we are still in a slow but persistent long-term bearish trend.
If the USD is boosted by the U.S. inflation release due later, it should push the price down further here, as the Euro is broadly weak.
I would be prepared to take a bearish bias if we get a bearish rejection of any of the nearby resistance levels today.
There is nothing of high importance due today regarding the EUR. Concerning the USD, there will be a release of CPI (inflation) data at 1:30pm London time, followed by testimony by the Chair of the Federal Reserve before Congress at 4pm.