Yesterday’s signals did not produce any new trade entries.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered between 8am and 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 1.1767, 1.1779, 1.1789, 1.1804, or 1.1840.
- 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 1.1743 or 1.1684.
- 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 we were seeing the price break down with strong momentum as it became clearer that Eurozone nations will be forced into economically damaging lockdowns or risk seeing their health systems overwhelmed. I saw the support level at 1.1684 as more or less marks the lower boundary of a multi-month range and a breakdown below this level would be a very bearish sign.
I was correct to look to the short side as the price fell over the day before recovering somewhat, as France and Germany both announced new lockdowns in an attempt to stop their exponential spread of coronavirus infections.
There has been a recovery in recent hours, with the support level at 1.1743 being re-established, but the Euro still seems like one of the weaker major currencies.
I would continue to look to the short side, but there is major policy input from the ECB due later, as well as key U.S. GDP data, which could push the price around in a way which disrespects the technical situation.
I will take a short trade today if we get a bearish reversal from either 1.1804 or 1.1789, with 1.1804 looking especially interesting due to the confluence of a round number and a short-term bearish trend line.
Regarding the EUR, the ECB will be releasing its Main Refinancing Rate and Monetary Policy Statement at 12:45pm, followed by the usual press conference 45 minutes later. Concerning the USD, there will be a release of Advance GDP data at 12:30pm.