EUR/USD: Bearish double top possible at 1.1381
Yesterday’s signals were not triggered, as there was no bearish price action when the resistance level at 1.1321 was first reached.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today only.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1381.
- 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
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1155.
- 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 the price looked weakly likely to fall further here over the course of the day, but there did not appear to be an attractive short trade set-up, so I thought it may be best to trade another currency pair for now.
I was wrong about the direction, as the price actually rose over the day to close at a new 50-day high price, meaning higher prices are more likely today.
We are seeing the bullish trend advance already as the price rises higher and looks set to test the key resistance level which I have identified at 1.1381.
Despite the bullish trend I would not be surprised to see a bearish reversal at 1.1381, making that level today’s key pivotal point.
The most important event of the month in the Forex market – the FOMC releases – happen later today, making technical analysis questionable as volatility and surprising moves can often follow these releases.
For this reason, it is best to be careful and not leave trades open during the second half of the New York session. However, if the FOMC releases have a negative effect on the USD, the price here could really soar due to the effect of the long-term bullish trend.
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, followed by the FOMC Projections, Federal Funds Rate, and Statement at 7pm, followed by the usual press conference half an hour later.