EUR/USD: Resistance at 1.1039 looks pivotal
Last Thursday’s signals produced a nicely profitable short trade from the bearish pin candlestick which rejected the resistance level identified at 1.1100.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken before 5pm London time today only.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1039, 1.1100, or 1.1120.
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 or 1.0966.
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 last Thursday that the most potential would be on the short side if the ECB said anything more dovish than the market is expecting, so I would favour short trades. This was a great call as the price fell quite strongly after rejecting the resistance level I had identified at 1.1100.
The picture is still bearish, with a risk-off environment and a generally weak Euro. I would remain at least weakly bearish provided the price can stay below 1.1039. Above that level, it would look like a deeper bearish retracement.
Although the price still looks a little more likely to fall, the area around the big round number at 1.1000 could be very supportive.
Concerning the EUR, there will be a release of German IFO Business Climate data at 9am London time. There is nothing of high importance due today regarding the USD.