EUR/USD: Big round number at 1.2000 may halt rise
Yesterday’s signals were not triggered as none of the key levels were ever reached.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered between 8 am and 5 pm 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 1.2000.
- 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 1.1916, 1.1897, 1.1883, 1.1863, or 1.1827.
- 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 higher prices were likely over the short-term, and I would take a strong bullish bias if as I expected the price closed in New York above 1.1876.
This was a good call as the price did rise over the course of the day yesterday, closing in New York well above 1.1876.
The price has reached a new 2-year high not far from the big round number at 1.2000, which may well provide some resistance.
The Euro is one of the strongest major currencies, while the U.S. Dollar is in a long-term downwards trend which is likely to continue.
Yesterday’s move printed several new higher support levels.
The short-term price action is suggesting a period of consolidation above the highest support level at 1.1916.
I am very happy to take a long trade here today from any firm bullish bounce at any support level identified above. However, I think it is unlikely that we will see a price much higher than 1.2000 today, so that should be a good area for a profit target on any long trade.
If this price is hit following a spike up, it may be possible to scalp some short pips off that level.
There is nothing of high importance due today regarding either the EUR or the USD.