EUR/USD: U.S. Dollar is selling off strongly
Yesterday’s signals were not triggered, as there was no bearish price action when the price first reached 1.1517.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken prior to 5 pm 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 1.1570 or 1.1624.
- 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 1.1517 or 1.1467.
- Place the stop loss 1 pip below the local swing low.
- 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 I remained bullish as long as the price held up above 1.1394 and I was ready to take a long trade from a bullish bounce at either that level or the lower support level at 1.1371.
I was correct to be bullish, as the price has risen very strongly over the past day and is now trading at a multi-month high price well above the psychologically important 1.1500 level.
This currency pair tends to trend very reliably, so this long-term bullish breakout is significant.
The Euro, along with the Australian Dollar, is very strong, while the USD has begun a long-term downwards trend which is beginning to accelerate. We also see a strong flow out of the USD and into precious metals such as Silver and Gold, which are also breaking to new long-term high prices.
Another bullish technical feature is seen in the price chart below, which exhibits a bullish price channel.
There is no reason not to be bullish as this currency pair tends to advance for a while after showing above-average volatility such as we have just seen. Therefore, a long trade from a bullish bounce at 1.1517 is an attractive prospect.
There is nothing of high importance due today regarding either the EUR or the USD.