EUR/USD: USD recovering
Yesterday’s signals were not triggered, as there was insufficiently bearish price action at 1.1477.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered before 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 1.1517 or 1.1570.
- 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
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1250, 1.1218, or 1.1185.
- 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 best approach here was likely to be looking for long trades from bounces at support levels following retracements. However, trading more obvious safe havens I thought was likely to be a more profitable approach. This was a good call as the price consolidated over the day between my nearest support and resistance levels before breaking down more firmly as the USD made a small comeback.
The picture now remains a bullish trend with the weekend gap filling on a bearish retracement. The Euro has benefitted from the coronavirus panic even though Europe is an area of high concern, including of course Eurozone member Italy which is in a total lockdown.
As both the EUR and USD are in a state of flux and volatility, we are likely to see this fairly volatile consolidation continue, but I think the support level at 1.1250 will hold if it reached today.
This is maybe not a bad pair to trade on shorter time frames today, but the USD/JPY is in the market’s primary focus. I would be happy to take a long trade from a bullish bounce at 1.1250.
There is nothing of high importance due today regarding either the EUR or the USD.