Last Thursday’s signals produced an excellent, very profitable short trade from the bearish outside candlestick which rejected the resistance level identified at 1.1093.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered between 8am and 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 1.1039, 1.1043, 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 1.1015 or 1.0993.
⦁ 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 last Thursday that I was biased towards long trades today, but I noted the release due of the minutes of the latest ECB policy meeting, which could push the price around in an unpredictable way.
In fact, the price made a strong downwards turn after hitting the resistance level at 1.1093, which produced a continued move down on Friday as the U.S. Dollar strengthened everywhere.
This pair is now in a very interesting position. The daily chart shows the near completion of a bearish head and shoulders patter, with the neckline at the pivotal point of 1.0993. This is very confluent with the big psychological round number at 1.1000.
Therefore, it seems this area around 1.1000 is going to be important – if it holds, we can expect another upwards move, but if the price gets established below 1.0993, it would be a bearish sign.
I doubt we will get a break on what is likely to be a quiet Monday, so I expect key support levels to hold today. The best approach would probably be to scalp bullish bounces off 1.1015 and 1.0993.
There is nothing of high importance due today concerning either the EUR or the USD.