EURUSD: Resistance at 1.1093 remains pivotal
Yesterday’s signals produced a short trade from the hourly doji which rejected the resistance level at 1.1093, which is in floating profit. It would probably be wise to let it run but be ready to exit if the U.S. Dollar takes another dive later.
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 1.1093 or 1.1107 or 1.1140.
- 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 1.1071, 1.1056, 1.1043, 1.1039, 1.0993.
- 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 the most interesting and relevant feature technically now in this pair was the strong resistance level at 1.1093. The most high-probability trade would be a bearish failure at that level, followed by a bearish reversion to the mean, so I would be prepared to take a cautious and weak bearish bias following a rejection of 1.1093.
This was a great call as despite the fall in the U.S. Dollar yesterday, the price here was unable to break the strong resistance at 1.1093, and this short trade set up as I expected and is now in profit.
This currency pair is caught between weakness in both the Euro and the U.S. Dollar. It is notable that when almost every other USD currency pair went strongly against the USD, that this pair could not break above 1.1093.
I think much will now depend upon whether the support at 1.1071 breaks first (that would be more bearish) or the resistance at 1.1093 (that would be more bullish).
I would not look to make any new trade entries with this currency pair today.
There is nothing of high importance due today concerning the EUR. Regarding the USD, there will be a release of the ADP Non-Farm Employment Change forecast at 1:15pm London time, followed by ISM Non-Manufacturing PMI data at 3pm.