EUR/USD: False breakdown yesterday
Yesterday’s signals were not triggered as the bullish price action took place a bit below the support level identified at 1.1322.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered before 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 1.1294, 1.1320, or 1.1354.
- 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 Ideas
- Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1218 or 1.1155.
- 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 technical picture was dominated by a medium-term bearish head and shoulders pattern with an obvious pivotal “neckline” at 1.1222. This meant that 1.1222 was likely to be very pivotal. At the upper end, I thought that the 1.1354 level would be important.
The price managed to get a little below 1.1222 before rebounding, but not by much, so this was not a bad call.
The Dollar is stronger on increased risk-off sentiment as a safe haven, but the Euro is not so weak.
We really need to see the price get established below 1.1218 or maybe even the round number below at 1.1200 before I will feel really comfortable taking a bearish bias.
Having said that, the price chart below is showing a bearish wedge pattern playing out with a sequence of lower highs, which is a bearish sign.
Therefore, I will take a bearish bias today if we get two consecutive hourly closes below the nearest support level which has been adjusted down slightly to 1.1218.
There is nothing of high importance scheduled today regarding either the EUR or the USD.