Last Tuesday’s EUR/USD signals were not triggered, as the bullish price action which occurred at the support level identified at 1.1914 was not strong enough to trigger a long trade entry signal.
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 1.1991, 1.2028, or 1.2075.
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 1.1914, 1.1867, or 1.1851.
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 Tuesday that the technical picture was very evenly balanced between bulls and bears on all time frames – there was no long-term trend. Over the short-term, the price was consolidating within a very narrow range from 1.1914 to 1.1941.
I saw the support level at 1.1914 as likely to be pivotal and thought that if the price made two consecutive hourly closes below 1.1914, it would be likely to fall further.
This was technically correct for the rest of that day as the price did fall a bit further after getting established below 1.1914, which did hold for most of the London session as support, but it was not accurate over the longer term, nor was it a very useful call.
The picture now is conflicted but more volatile and interesting. The price chart below shows that the events around yesterday’s FOMC release succeeded in pushing the price up strongly and forcing a bullish breakout from the narrowing triangle formation drawn with trend lines in the chart. However, the price seems to have made a convincing double top just below the very important round number at 1.2000, and the price has been falling firmly from there over the past few hours and heading back towards the triangle zone.
Short-term price movement looks difficult to predict in this currency pair. I think the only worthwhile opportunity which might set up today will be a long trade from a bullish bounce from the area between 1.1914 to 1.1900 if reached, as we have there a key support level, a round number, and an ascending trend line.
There is nothing of high importance due today regarding either the EUR or the USD.