Yesterday’s signals were not triggered, as there was no bullish price action at any of the support levels identified in yesterday’s item.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered before 5pm London time today.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1840, 1.1881, or 1.1929.
- 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 1.1804, 1.1789, or 1.1767.
- 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 long trades were still likely to work out best, but although there were many support levels nearby, it was hard to see one of them as standing out as looking especially reliable.
This was a fairly good call as a few of these levels were hit and the action was unreliable, so it was best to stand aside as I had thought.
The technical picture is still essentially one of a consolidation below 1.1881, and a new feature shown in the price chart below is the consolidating triangle formation which envelops the recent price action.
It is hard to say whether this consolidation pattern is bullish or bearish. The price would be at a long-term high above about 1.2000 but also at a long-term low below about 1.1600.
It is quite likely we will see the price of all the major Forex pairs consolidate ahead of the U.S. Presidential election next Tuesday, which may produce a breakout.
I will take a bearish bias today if we see two consecutive hourly closes below 1.1789. It may be that the Euro starts to get sold off as the chance that several Eurozone nations will be forced into a second round of economically damaging coronavirus lockdowns seems to be increasing.
There is nothing of high importance due today concerning the EUR. Regarding the USD, there will be a release of Durable Goods Orders at 12:30pm London time followed by Consumer Confidence data at 2pm.