EUR/USD: ECB Stimulus
Yesterday’s signals were not triggered as there was no bullish price action at any of the several support levels which were reached.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered prior to 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 1.0960 or 1.1056.
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 1.0777, 1.0746, 1.0682.
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 I preferred to take short trades, but it should still be possible to take short-term long trades on shorter time frames from bounces at key support levels. I was looking for a short trade from a bearish bounce at 1.1056. This was a relatively good call as although 1.1056 was never reached, the price fell over the day and broke through several support levels, producing a more bearish technical picture.
The Euro has managed to find some support just above a really key support level nearby at 1.0777 which is a long-term low price and supportive inflection. Even though the Eurozone is currently being hit very hard by the coronavirus pandemic, yesterday’s ECB emergency stimulus of 750 billion Euros seems to have shored up its currency, at least over the short term. After making very strong gains, the U.S. Dollar also seems to be retracing somewhat.
However, I remain broadly bearish and expect the Euro to eventually break down further, so I would be very happy to take a short trade from a bearish reversal at 1.0960 if this sets up later.
There is nothing of high importance scheduled today concerning either the EUR or the USD.