Yesterday’s signals were not triggered, as there was no bearish price action when the price first reached the resistance levels identified at 1.1688 and 1.1719.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8 am and 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 1.1775 or 1.1826.
- 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 1.1716, 1.1693, or 1.1638.
- 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 although the price had managed to print a new higher support level at 1.1638, bulls should not get too excited for a more extended bullish move until we see the price get established above 1.1688 and ideally also 1.1700.
I thought that this currency pair still looked likely to turn bearish again, but if we saw the day close above 1.1700, that will suggest that the bullish retracement will have further to run.
I was wrong to be pessimistic about the chance of a stronger bullish move, which played out yesterday. However, I was correct to look to 1.1688 / 1.1700 as a pivotal area as the price did continue to rise by about another 40 pips or so. The break above 1.1700 saw a small retracement back to the round number followed by a continued rise.
The bullish movement seems to be continuing as the London session gets underway, and the Euro gained relatively strongly yesterday, so it looks likely that we will see the price rise today to test the next resistance level at 1.1775. However, this is likely to be strong resistance, so I do not think we will see a close above that level at the end of today’s New York session – it is likely to hold.
Concerning the EUR, the President of the ECB will be speaking at a conference at 8:20 am London time. Regarding the USD, there will be a release of ADP Non-Farm Employment Change data at 1:15 pm followed 15 minutes later by Final GDP numbers.