Last Tuesday’s EUR/USD signals were not triggered, as none of the key support and resistance levels identified that day were reached.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered between 8am and 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 1.2209 or 1.2232.
- 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 1.2161, 1.2139, 1.2129, or 1.2126.
- 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 if the price could get established above the major psychological quarter-number at 1.2250, that would be a bullish sign and would likely produce an extended bullish price movement.
Unfortunately, this was not a great call, as we did have two consecutive hourly closes above 1.2250 that day but the price did not rise afterwards, and it then made a strong bearish move just the next day.
It is still possible to say that the 1.2250 area has continued to act as a resistance zone, albeit an imprecise once.
Over the past few hours, the price has begun to make a bullish reversal, and an up day looks marginally more likely than a down day today. However, bulls will probably struggle to push the price higher over the coming hours. This may depend upon the U.S. GDP data due later and whether a surprise there will be negative or positive for the USD.
I think the best approach to trading this currency pair today will be to take cautious long trades if and when the resistance levels at 1.2209 and 1.2232 respectively become invalidated.
Concerning the USD, there will be a release of Preliminary GDP data at 1:30pm. There is nothing of high impoprtance due regarding the EUR.