Last Thursday’s EUR/USD signals were not triggered, as there was no bullish price action when the support level at 1.1789 was first reached.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered 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 1.1801 and 1.1837.
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 1.1745 or 1.1700.
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 technical picture had become seriously bearish, evidenced by the facts that the price was contained within a relatively wide but symmetrical bearish descending channel shown within the chart below, and that the price was continuing to make new multi-month lows not seen for four months.
This was a good, accurate, and profitable call, with the price moving down by more than 50 pips since then.
The technical picture is even more bearish now, as the price chart below shows the price at the time of writing is not only breaking down to new multi-month lows, but the lower trend line of the descending price channel has been adjusted lower to remain symmetrical.
While the big quarter-number at 1.1750 confluent with the horizontal support level at 1.1745 may provide a barrier to easy downwards advance to prices below that area, the price is showing clear bearish breakdown momentum, albeit on low volatility.
I expect lower prices today, and we may even see the price get as low at the second lower support level identified at 1.1700.
The U.S. dollar is strong almost everywhere now as 10-year U.S. treasury yields hit a new 1-year high, while the euro is one of the weakest major currencies due to the increase pace of ECB’s pandemic emergency purchase program and the growing economic impact of the latest wave of coronavirus infections as the Eurozone struggles to mount an effective vaccination campaign. It can therefore be argued that fundamentals are on the correct side of a short trade in this currency pair.
There is nothing of high importance due today regarding the EUR. Concerning the USD, there will be a release of CB conumer confidence data at 3pm London time.