EUR/USD: Yet Euro is not relatively weak
Yesterday’s signals gave a long trade entry signal which produced a losing trade, after the bullish bounce at the support level of 1.1786.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken before 5pm London time today only.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1828 or 1.1875.
- 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, 1.1685, or 1.1624.
- 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 when the price would hit the next support level, we would learn something significant. This was a good call as after a little initial support, the price was able to get established below 1.1786 and flip that level into acting as probable new lower resistance.
I also thought that a significant break below 1.1745 would be a significant bearish sign but that has not happened yet.
The Forex market is being driven by risk-off sentiment which is sending flow into the U.S. Dollar and Japanese Yen while hitting riskier currencies. However, in this currency pair, we see more a case of a strong Dollar than a weak Euro, which gives some hope for a bullish rebound.
I am still prepared to take a long trade if we get a strong bullish bounce at 1.1745 because this support level is confluent with a major quarter-number of 1.1750. A long trade here could have good medium-term potential for swing traders as we are near the lower boundary of the price range from the last couple of weeks or so, while we still technically have a long-term bullish trend adding impetus in that direction.
I am also prepared to take a short trade from a bearish reversal at 1.1828 if it sets up later.
There is nothing of high importance due today regarding either the EUR or the USD.