EUR/USD: Long-term bearish drift
Last Thursday’s signals would have produced a nicely profitable trade from the bearish double inside candlestick reversal from the resistance level I had identified at 1.0843. This capped the high of that day but unfortunately the set up was too late to trigger a short trade entry.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today only.
Short Trade Idea
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.0923.
- 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 Idea
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.0814.
- 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.
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 thought the price was likely to fall further over the coming days to at least 1.0750 and perhaps further, even to the support level at 1.0710.
I wanted to take a bearish bias if we had gotten a retracement to 1.0843 and a bearish reversal there.
This was a great call as the price retraced to 1.0843 and then fell over the rest of the week to 1.0730.
The price then rebounded quite strongly as the USD began to weaken on Friday, and this USD weakness has persisted as markets open this week. However, the EUR is not very strong, so we are seeing a weaker move here than we are in many other currencies.
I think the price action looks quite unpredictable, we have a weak medium-term bearish trend and quite uncertain-looking support at 1.0814. So, I prefer to avoid trading this pair today and have no real directional bias.
There is nothing of high importance due today concerning either the EUR or the USD.