Yesterday’s signals produced a very profitable long trade entry from the bullish bounce off the support level I had identified at 1.1961. It is probably a good idea to try to let at least some of this traded run further into profit if you have any still open, as the price is likely to rise higher today.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken prior to 5pm London time today only.
Short Trade Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2187.
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 1.2051, 1.2004, or 1.1961.
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 U.S. dollar was being sold everywhere today and risk-on sentiment appeared stronger, so it looked more likely that the price was going to make another attempt to break above 1.2000 today.
However, I thought it was very questionable whether the price would be able to get established above 1.2000.
I said I would take a long trade if the New York close was above 1.2005, which it was.
This was an OK call, although as it turned out, the price broke quite easily and very strongly above 1.2005, which put me into a new long trade entry at about 1.2070 when New York closed. I think I was correct to see the 1.2000 area as very pivotal.
Yesterday’s daily candlestick not only hit and closed at a new 2.5-year record-high price - a very bullish sign in itself - but it also had a very wide daily range and closed near its high, which are further signs that the price is considerably more likely than not to rise even higher today. Therefore, I am very comfortable taking a bullish bias today if we get a bullish bounce later at 1.2051 or 1.2004. If the price makes a New York close below 1.2000, that would be a sign that a quick bearish reversal is a likely outcome over the near term.
Regarding the USD, there will be a release of the ADP Non-Farm Employment Change data at 1:15pm London time, followed by the Chair of the Federal Reserve testifying before Congress at 3pm. There is nothing of very high importance scheduled today concerning the EUR.