EUR/USD: Bottom at 1.0639
Yesterday’s signals produced a short trade from the bearish reversal at 1.0815, but this only gave a little more than the 20 pips of profit required to break even.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered prior to 5pm London time today.
Short Trade Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.0960.
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 1.0815, 1.0710, 1.0639, or 1.0615.
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 would take a bearish bias if we had gotten a bearish reversal following a bullish retracement to 1.0815. I thought that there was probably also resistance at 1.0750.
I was right about the resistance at 1.0815, which initially held, but the price rallied to break up above that level which may now have flipped to become resistance. This is a sign of a less bearish technical situation, as is the consecutive higher daily closes since we saw the bottom ta 1.0639 which now looks like it will hold for the medium term.
We are generally seeing a pullback from the USD, and the situation now looks weakly bullish, but it is far too early to say we are not going to see further strong movements down to new lows. Therefore, I would wait out this retracement and look for a short trade from a bearish reversal at 1.0960 if it sets up later today.
Concerning the EUR, there will be a release of French Flash Services PMI data at 8:15am London time, followed by German Flash Manufacturing and Services PMI data at 8:30am. Regarding the USD, there will be a release of Flash Manufacturing PMI data at 1:45pm.