EUR/USD: Yet potential bearish double top at 1.1354
Yesterday’s signals were not triggered, as there was no bearish price action when the resistance levels identified at 1.1294 and 1.1320 were first hit.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered before 5 pm London time today.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1354.
- 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 1.1301, 1.1281, 1.1255, or 1.1241.
- 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 although the short-term price action had taken a bearish turn, the support immediately below looked messy and strong, so it does not look like a good idea to take a short trade here. I said I would avoid trading this currency pair or at least I would not be bearish above 1.1241.
This was a good call as the price moved up quite strongly after breaking out of the bearish wedge pattern.
The technical picture is now considerably more bullish in line with the long-term trend. However, there are initial signs of a bearish double top at or near the key resistance level identified at 1.1354.
There is plenty of support below the current price, and even if the price does not go on to break up above 1.1354 over the coming days, it seems likely that we will see some kind of bullish movement after the current short-term bearish pullback is completed.
I will be happy to take a long trade from a bullish bounce at any of the support levels identified above, as the U.S. Dollar weakens, and risk-on market sentiment continues.
There is nothing of high importance scheduled today regarding either the EUR or the USD.