EUR/USD: Bearish consolidation
Yesterday’s signals were not triggered, as none of the key levels were reached yet.
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 1.1251 or 1.1381.
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 1.1065, 1.0950, or 109.18.
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 would be to trade any reversals at either 1.1250 or 1.1065 and to then monitor any trades on short time frames to stay nimble and take profits before the high volatility causes a major turn in the price.
This was a fairly good call as the price has remained within this consolidation zone. However, the price action within this zone has turned more bearish, although the zone persists with signs that despite the Eurozone becoming the epicentre of the global pandemic, the Euro is stabilizing despite new strength in the U.S. Dollar.
I again see the best strategy here as trading reversals, either with a long from a bounce at 1.1065 or a short from a rejection of 1.1250.
Concerning the EUR, there will be a release of German ZEW Economic Sentiment data at 10am London time. Regarding the USD, there will be a release of Retail Sales data at 12:30pm.