EUR/USD: Resistance area at 1.1823 looks pivotal
Last Thursday’s signals were not triggered as there was no appreciate price action rejecting 1.1863 or 1.1827 strongly enough.
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 1.1823, 1.1863, 1.1882, or 1.1897.
- 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 1.1745 or 1.1685.
- 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 last Thursday that the price may still come back and start rising again, but if the price stayed below 1.1827 for some more hours, a strong and fast rise from here would become unlikely. This was a somewhat accurate call as this area roughly held for a while, however, it did not produce any kind of meaningful rise in the price.
The picture is more confused and uncertain now, with the fall in the value of the U.S. Dollar slowing down or maybe even halting. There is no sign of the price reaching a new long-term high, so the most likely medium-term scenario is a consolidation between the 1.1700 and 1.2000 handles.
Over the shorter-term, it seems clear that the area around 1.1823 is going to be pivotal. However I think this would be more meaningful if we get a bearish reversal there than if we get a bullish break – I would take a short trade, but would not be enthusiastic about a long trade above 1.1823 as there are several resistance levels close by, suggesting the true line of least resistance is downwards.
There is nothing of high importance due today regarding either the EUR or the USD.