EURUSD: Weakly bearish below 1.1018
Yesterday’s signals produced a short trade entry from the bearish pin candlestick which rejected the resistance level identified at 1.1018. This trade is in profit but looks doubtful to it would probably be wise to close it.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today.
Short Trade Ideas
⦁ Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1018, 1.1039, or 1.1056.
⦁ Place 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.
⦁ Take off 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 Ideas
⦁ Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.0993, 1.0966, or 1.0941.
⦁ Place 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.
⦁ Take off 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 it could be argued we are still in a slow but persistent long-term bearish trend.
Therefore, I was prepared to take a bearish bias if we had gotten a bearish rejection of any of the nearby resistance levels. We did, with the price responding very technically and cleanly rejecting the nearest resistance level at 1.1018.
The price has moved down, but the pace of the down trend is slowing, and volatility is very low, both which factors are suggesting that a deeper bullish pull back is becoming increasingly likely to happen. However, the downwards trend is still there, so I would again be looking to take a bearish bias at any bearish rejections of any resistance level detailed above.
Regarding the EUR, there will be a release of German Preliminary GDP data at 7am London time. Concerning the USD, there will be a release of PPI data at 1:30pm, followed by testimony by the Chair of the Federal Reserve before Congress at 3pm.