Last Thursday’s signals were not triggered, as there was no bullish price action when the price first reached the support levels identified at 1.2005 and 1.1961 for the first time.
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 1.2021, 1.2005, or 1.1985.
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 Thursday that the support level at 1.2005 which I identified as being very important due to its confluence with the big psychological round number at 1.2000 was being threatened and looked likely to break down. If we had gotten two consecutive hourly closes once the London session began below 1.2000, I thought that would be a bearish sign that the price was likely to fall further, probably to 1.1950.
This was a great call, as the price did break convincingly below 1.2000 that day and fell steadily over the day until it started to bottom out at 1.1950, as I had expected going into the later Asian session.
We saw a lot of new strength in the U.S. dollar last week which threatened to turn into a major trend reversal, but we are now seeing the dollar start to weaken again everywhere. The price has risen with reasonable strength since Friday, breaking the steepest bearish trend line shown in the price chart below and rising through an empty space.
The price, however, may now be close to running out of room to rise as it approaches a confluence of resistance at 1.2100, which is likely to be strengthened by the cluster of resistance levels above it.
I see a potential short trade at 1.2097 or 1.2120 as the best potential opportunities, which might set up in this currency pair today, despite the renewed bullishness and the general weakening of the dollar.
There is nothing of high importance scheduled today regarding either the EUR or the USD.