Last Tuesday’s EUR/USD signals were not triggered, as there was insufficiently bearish price action for a trade entry when the resistance levels identified were first reached.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered prior to 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 1.1983 or 1.2047.
- 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 1.1920/1.1910, 1.1884, 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 price looked likely to fall further today, with the next level to watch being the flipped resistance to support at 1.1884. If that level broke down, I thought that the price was likely to reach 1.1851.
I was wrong about the day being a down day, but I was correct about the level at 1.1884 being pivotal as it held firm almost to the pip, producing a rise in the price.
The bearish momentum was strong but ended quickly. We are now seeing a bullish recovery which is not especially strong but is continuing to hold up from new higher key support levels which get printed. At the time of writing, the price is rising from the nearest such level at 1.1920.
This bullish situation seems quite likely to continue today, but there is a major policy release due from the Bank of England which could have a secondary effect on the value of the euro and cause some volatility later.
The line of least resistance seems to be upwards, but it is worth watching the support levels nearby especially 1.1920. If that and 1.1910 break down, we will be very likely to reach 1.1884, and if that level breaks down, then 1.1851 comes into sight which is a very important technical level.
I think traders will do better today to focus on the GBP/USD currency pair than the EUR/USD currency pair.
Concerning the USD, there will be releases offFinal GDP and unemployment claims data at 1:30pm London time. There is nothing of high importance due today regarding the EUR.