Yesterday’s signals were not triggered, as none of the key levels identified have been reached yet.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken prior to 5pm 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 1.2187 or 1.2260.
Place 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 1.2107 or 1.2060.
Place 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 this currency pair was in a bullish consolidation pattern, which remained bullish as long as the price stayed above the key support level at 1.2106. I noted that there was still weak bullish momentum, but it was not clear that the price can get any higher than 1.2200.
This was a good call as the price has held up above support and continued to inch higher very slowly within its long-term bullish trend while remaining below 1.2200.
Yesterday saw a new 50-day high closing price which suggests that the price is likely to move higher over the coming days. The Japanese yen and the British pound have also both just closed at new long-term highs against the U.S. dollar, suggesting that the real story continues to be one of U.S. dollar weakness.
Conditions are tending to drive the price higher, but the price has shown a reluctance to even reach 1.2200, which is an area where the price consolidated when it was previously there, suggesting that a congestion zone remains just above where we are now. This means that it looks as if the EUR/USD will struggle to rise higher, although it “wants” to.
I will take a long trade today if there is a bullish bounce at 1.2107, or a short trade if there is a bearish reversal at 1.2187. I will also be much more bullish at the end of today if we get a New York closing price above 1.2187, or even better, 1.2200.
Regarding the EUR, there will be releases of French and German Flash Manufacturing and Service PMI data between 8:15 and 8:30am London time. Concerning the USD, there will be a release of retail sales data at 1:30pm, followed by flash manufacturing at 2:45pm, then FOMC economic projections, statement, and federal funds rate at 7 pm followed by the usual press conference half an hour later.