EUR/USD: Support at 1.1827 looks pivotal
Yesterday’s signals were not triggered, as there was no bullish price action when any of the key support levels were hit.
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 1.1863, 1.1882, or 1.1897.
- Put the stop loss 1 pip above the local swing high.
- Move the stop loss to break even once the trade is 20 pips in profit.
- Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1827 or 1.1780.
- Put the stop loss 1 pip below the local swing low.
- Move the stop loss to break even once the trade is 20 pips in profit.
- Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
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 the short-term price action was suggesting a period of consolidation above the highest support level at 1.1916.
I was looking to take a long trade here from any firm bullish bounce at any support level.
This was enough to keep out of trouble, but I was wrong in the end to expect consolidation above 1.1916. The price actually fell heavily, breaking cleanly through several expected levels of support.
The price seemed to be bottoming out during the Asian session but has subsequently fallen even further to new short-term lows below the former support level at 1.1827.
The technical situation here definitely changed, with the USD making a strong comeback after selling off within a long-term bearish trend. It is far too early to say this trend is over, however.
The British Pound and Euro are among the biggest losers against the USD.
The price may still come back and start rising again, but if the price now stays below 1.1827 for some more hours, a strong and fast rise from here will become unlikely.
There is nothing of high importance due today regarding either the EUR or the USD.