EUR/USD: Yet strong resistance above 1.1000
Yesterday’s signals were not triggered as there was no bearish price action when 1.0971 was first reached.
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 1.0971 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
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.0921 or 1.0887.
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 as long as the price remained above 1.0921 the technical picture will remain firmly bullish, and even above 1.0887 it would be more bullish than bearish.
My approach was to take a bullish bias and look for long trades from bounces at 1.0921 or 1.0887.
This was a good call, as the price rose over the London session, and is up over the past 24 hours, although the price never retraced enough to reach 1.0921.
The price rise initially broke the resistance at 1.0971, but then fell back below that while respecting the level, so that resistance remains intact.
The big story today in the Forex market is the strong USD which is a reversal from the earlier part of the week. As the EUR is a relatively strong currency, the price here does not fall by much – the Dollar is making better progress against weaker currencies such as the British Pound.
I see this currency pair as having the most potential on the long side, so when the USD begins to sell off again, this is likely to be a strong riser. It is also bullish technically that the price still remains above nearby support levels.
I will take a bullish bias today if we get a retracement to 1.0921 or 1.0887 and a bullish bounce at either level, triggering a long trade entry.
Concerning the EUR, there will be a release of French Flash Services data at 8:15am London time, followed 15 minutes later by German Flash Manufacturing & Services PMI data. Regarding the USD, there will be a release of Flash Manufacturing PMI at 2:45pm followed by the Chair of the Federal Reserve giving a minor speech at 7:30pm.