EUR/USD: Medium-term consolidation pattern persists
Last Thursday’s signals were not triggered, as the bearish price action took place above the resistance level at 1.1289.
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 1H1 time frame immediately upon the next touch of 1.1309 or 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 1H1 time frame immediately upon the next touch of 1.1245 or 1.1195.
- 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 last Thursday that due to the continuing ranging consolidation pattern between 1.1195 and 1.1354 the best trade which would be likely to set up over the day would be a short trade from any of the nearby resistance levels. This was a fairly close call as the price did fall after briefly exceeding the nearest resistance level.
The medium-term consolidation pattern is still holding. The short-term price action is quite bullish with the Euro being the strongest major currency since markets opened for the week a few hours ago, with the price breaking up above the former resistance level at 1.1245 and the psychological quarter-number at 1.1250.
Despite the short-term bullishness, there is no reason not to expect another bearish wave to start below the major resistance level at 1.1345.
There is nothing of high importance scheduled today regarding the EUR. Concerning the USD, there will be a release of ISM Non-Manufacturing PMI data at 3 pm London time.