EUR/USD: Today may produce breakout but direction uncertain
Yesterday’s signals produced a profitable long trade from the bullish pin candlestick which rejected the support level identified at 1.1786. It would probably be wise to exit any remainder of this position for profit right away, as the price seems very rangebound.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm 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 1.1849, 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 1.1786 or 1.1745.
- 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 key support and resistance levels at 1.1785 and 1.1850 were likely to hold until the New York session today at least. I thought that we would then be more likely to see a breakout from this range tomorrow.
I was looking to take either a long trade from a bounce at 1.1785 or a short trade from a reversal at 1.1849.
This was a good call as these levels held and a long trade from 1.1785 set up and was profitable.
I still agree with my assessment yesterday that Thursday would likely see a breakout from the aforementioned price range.
Today we will get some input from the U.S. Federal Reserve even if quietly and relatively indirectly, but as the week has been so dull in the market and it is Thursday, we are likely to see more action here now.
There is probably a greater chance that the breakout will be bullish than bearish due to the fact there is an inactive yet still technically dominant long-term trend here against the U.S. Dollar.
I will take a bullish bias today if we get two consecutive hourly closes above the nearest resistance level at 1.1850.
There is nothing of high importance due today regarding the EUR. Concerning the USD, the Chair of the Federal Reserve will be giving a minor speech at 2:10pm London time, as the Jackson Hole Symposium gets underway.