EUR/USD: New 2.5-year low price reached Friday
Last Thursday’s signals were not triggered, as there was no bullish price action when the support level identified at 1.0865 was reached.
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 1.0865, 1.0889, or 1.0904.
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.
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 this pair had made new 2.5-year low prices and the picture continued to look very bearish. There was no support below 1.0865 until the psychological level of 1.0750 at the earliest, so I thought the price could fall quite sharply if it could get below 1.0865.
I was looking for a short trade following a bullish retracement. This was a good call, as the price fell as low on Friday as 1.0829, giving another firm down day.
The Euro remains the weakest major currency. There is no reason not to be bearish, although it is possible that the price is putting in a low at about 1.0825. If this low can hold today, it would suggest a deeper bullish retracement could be about to happen. Conversely, if the price can trade below 1.0825 it would suggest a further fall in the near future with nothing to stop the price from reaching 1.0750. Therefore, if we get a couple of consecutive hourly closes below 1.0825 early in the London session, I will take a short trade and have a bearish bias, but it has to happen quickly as the U.S. market is closed today.
There is nothing of high importance due today regarding either the EUR or the USD. It is a public holiday today in the U.S.A.