Last Wednesday’s signals produced a profitable long trade from the bullish inside candlestick bounce off the support level identified at 1.2060.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be taken before 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 1.2097, 1.2120, or 1.2154.
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 1.2060 or 1.2005.
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 last Wednesday that I saw the best opportunity which might set up as a long trade from a bullish bounce that might happen at the support level of 1.2060. This was a good call as it did set up and it was the best opportunity.
Since then, the technical picture here has certainly become more bearish. We see the price chart below dominated by a strong, medium-term bearish trend line capping the swing highs. The price has tested the supportive area at 1.2060 for a third time and this bounce now seems to be lacking conviction, with the action turning bearish again over the short-term and the price looking like it will now make another attempt to break below 1.2060.
If the price heads lower, it could reach the next support level at 1.2005, which could be a significant long-term low due to its supportive confluence with the major round number at 1.2000. So, although the euro is relatively weak and the U.S. dollar has been bottoming out within its long-term bullish trend, a strong bullish move from 1.2005 later cannot be ruled out.
I am also ready to take a short trade from a bearish reversal at 1.2097, which looks to be both a strong flipped level, and is also quite confluent with the round number at 1.2100.
Today looks more likely to be a down than up day.
There is nothing of high importance scheduled today regarding either the EUR or the USD.