EUR/USD: Supportive area near 1.0820
Last Thursday’s signals were not triggered, as the bullish bounce at the support level identified at 1.0832 did not take place until after the London close.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered between 8am and 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 1.0923, 1.0939, or 1.0968.
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 although there were signs that the price was going to move down, it also looked as if the price would continue to consolidate between about 1.0850 and 1.1000 over the near term. I took no directional bias as a result. This was a good call as the price moved little that day, and the support level of 1.0832 held up.
The technical picture now is more bearish, as we are certainly seeing a pattern of lower highs and somewhat lower lows over the medium term, but the pattern is weak, and the price remains more or less within the consolidation zone I mentioned earlier. The support level at 1.0832 has been invalidated so the price does have room to fall, but it seems that there is buying the closer we get to 1.0800 or even 1.0820. The USD is broadly strong, and the Euro is showing relative long-term weakness, which also supports the bearish case.
I prefer short trades, but I do not see any good chance of a bearish breakdown happening today. This means that it would make sense to wait for a pullback to resistance and a bearish rejection of such a level before taking any short trade entries. There probably will not be any good opportunity to trade this currency pair setting up today anyway.
There is nothing of high importance due today concerning either the EUR or the USD.