EUR/USD: Support at 1.0814 breaking down
Yesterday’s signals produced a short trade entry from the large outside candlestick which rejected the resistance level identified at 1.0923.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered prior to 5pm London time today.
Short Trade Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.0887.
Put the stop loss 1 pip above the local swing high.
Move the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trade Idea
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.0710.
Put the stop loss 1 pip above the local swing high.
Move the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
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 the short-term action suggested that the price was a little more likely to move down that up today, so a strong bearish reversal from 1.0923 could give a short trade entry opportunity and I would take it. This was a good call as this did set up and provide a profitable short trade entry, although I did expect the support at 1.0840 to hold so maybe that made my call less valuable.
The picture is now looking increasingly bearish as not only has the support at 1.0840 broken down, but so has the support at 1.0814. The price now has room to fall all the way to the next support level at 1.0710 or perhaps the big quarter-number at 1.0750. There is no reason not to take a bearish bias as long as hourly closes below 1.0814 persist over the coming hours, with the Euro one of the weaker global currencies and the USD strong everywhere except against the Japanese Yen.
Regarding the EUR, there will be a release of EU Economic Forecasts. Concerning the USD, there will be a release of the ADP Non-Farm Employment Change forecast at 1:15pm London time.