EUR/USD: Strong support likely at 1.14 / 1.15
Yesterday’s signals produced a somewhat profitable short trade from the bearish inside candlestick rejection of the resistance level at 1.1719.
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 1.1674, 1.1692, 1.1719, or 1.1775.
- 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 1.1624 or 1.1517.
- 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 there were many reasons to be bearish, with every reason to expect a further fall to at least the next key support level which I had identified at 1.1624. I was only looking to take short trades yesterday.
This was a good call as the price moved down over the day, and the best trade opportunity was a short trade from the bearish reversal at the resistance level at 1.1719.
The British Pound recovered somewhat yesterday, but the bearish trend here continued. However, we are seeing the bearish momentum slowing down. On the other hand, we saw yet another lower resistance level printed by the price action over the past day at 1.1624.
The odds remain with the bears over the next day, but I would not be surprised to see a bullish retracement begin from a bullish bounce at 1.1624 if that level is reached later today.
If the price can get established below 1.1624, that would be a bearish sign, as the price has a lot of room to fall until about 1.1500. We can expect very solid support at the 1.1500 / 1.1400 area if it is reached.
Regarding the EUR, there is nothing of high importance due today. Concerning the USD, the Chair of the Federal Reserve and the Treasury Secretary will be testifying before Congress at 3pm London time.