EUR/USD: Support level at 1.0993 looks pivotal
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 before 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 1.1039.
- 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 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 I would remain weakly bearish below 1.1039, but bears should want to see the price trade below 1.1000 soon or we had a greater chance of a deeper bullish retracement.
This was an excellent call as the price fell to 1.1000 before bouncing bullishly. The price is now falling again and everything is bearish on all time frames, although not strongly so, with one exception: bears really need to see the price get established below 1.0993 to trade at new long-term lows and below this confluence with the major round number and big psychological level at 1.1000. So, the support at 1.10993 is going to be pivotal today, and I would take a bearish bias if we can get two consecutive hourly closes below it.
Despite that, beware of the FOMC release due later because it can change everything dramatically, even if the price is trading bearishly below 1.0993 and falling at the time of the release.
Concerning the USD, there will be a release of the FOMC Statement and Federal Funds Rate at 7pm London time followed by the usual press conference half an hour later. There is nothing of high importance due today regarding the EUR.