Last Thursday’s signals produced profitable trades both long from the support level identified at 1.1726 and short from the resistance level identified at 1.1767.
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 1.1741, 1.1767, or 1.1779.
- 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 1.1684 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 last Thursday that I would take a bearish bias if we got a bearish reversal at 1.1767, or two consecutive hourly closes below 1.1725 during the day’s London session.
This was a good call as we got a bearish reversal at 1.1767 and the price has continued to move down from there, albeit slowly. I was correct to look to the short side here.
We do not have any real long-term trend, but it is true that we have seen the U.S. Dollar strengthen over recent days and weeks, and the Euro weakens. The price is not very far from new multi-month low prices, so the long-term picture is beginning to look more bearish.
Technically, the price looks likely to continue to fall very slowly to hit the nearest support level at 1.1684. As it is a typically quiet Monday, this level is quite likely to hold, so a long scalp trade from a bounce here is the only likely long opportunity I see.
Swing traders and scalpers should also watch for chances to get short from bearish reversals at 1.1741 or higher resistance levels, which looks to be the better opportunity if it sets up later.
Concerning the USD, the Chair of the Federal Reserve will be giving a minor speech at 1 pm London time. Regarding the EUR, the President of the ECB will be giving a minor speech at 1:45 pm.