Yesterday’s signals may have produced a profitable long trade from the bullish bounce at the support level I had identified at 1.1850.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken prior to 5pm London time today.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1929 or 1.1964.
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 1.1887, 1.1848, or 1.1815.
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 the bullish recovery after the recent sharp fall in price looked quite fragile, with the price barely sitting on new support at 1.1850 which looked weak and quite likely to break down. I did see a good potential long trade opportunity from a bullish bounce at 1.1815 as a double bottom.
This call was too cautious, as the price action became more bullish after finding strong support at 1.1848 during the New York/London overlap. The price rose firmly to close at a new 50-day high at the end of yesterday’s New York session – always a bullish sign – and the price established yet another new higher support level later, at 1.1887. At the time of writing, the price has moved up strongly and is now testing the resistance level at 1.1929.
There is no doubt we have a much more bullish picture and possibly the start of a long-term bullish breakout trend. I am definitely interested in buying at support levels when confirmed by price action. I am still cautious about the fact that the price still faces an area of strong long-term resistance between 1.1929 and 1.2000 and we may well see a long-term bearish reversal in this area.
Regarding the USD, there will be a release of Preliminary GDP and Unemployment Claims data at 1:30pm London time, followed by Revised UoM Consumer Sentiment at 3pm and the FOMC Meeting Minutes at 7pm. There is nothing of high importance due today concerning the EUR.