EUR/USD: Former support at 1.0814 has been invalidated
Yesterday’s signals produced a losing long trade from the bullish inside hourly candlestick which rejected the support level identified at 1.0817.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken before 5pm London time today only.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.0887 or 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
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.0710.
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 yesterday that I would be prepared to take a long trade from a bullish bounce at 1.0817, or alternatively I would take a bearish bias if we had gotten two consecutive hourly closes today below that level. This was not a great call as there was a bullish bounce there which did not work out on the long side.
The price action over the past day has been sideways and consolidative, the only new technical development is the invalidation of the former support level at 1.0817 which means that the price now has room to fall all the way to 1.0750 or even 1.0710. However, there is still buying every time the price gets near the round number at 1.0800.
I would stand aside and wait for the price to retrace and fail at the nearest resistance level at 1.0887 before taking a short trade.
The Euro remains probably the weakest major currency over the long term.
There is nothing of high importance due today concerning the EUR. Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time.