EUR/USD: More bearish below 1.0814
Last Thursday’s signals were not triggered as neither of the key support and resistance levels identified were reached that day.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 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 1.0865.
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 Idea
Go long following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.0814.
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 would have taken a bearish bias on this currency pair if we had gotten a bullish retracement to the 1.0825 area with a firm bearish reversal there.
The price made a high that day just a few pips off 1.0825 but the level was not touched – nevertheless, it was a correct call as it was basically a bearish day.
The strong downwards trend in this pair finally took a break on Friday, after the price bottomed out at around 1.0780 over a few days and then broke up above the former resistance level at 1.0825. The price continued up with some momentum before peaking and making a bearish turn again just below 1.0865 which was my next resistance level.
The price is currently sitting on 1.0814 which I see as a pivotal point and new support level: if this level holds up going into the London session, we will be more likely to see an up day today. If it quickly breaks down below 1.0814 and closes down there for 2 consecutive hours during the first half of today’s London session, I will take a bearish bias for the day.
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.