Last Thursday’s EUR/USD signal was not triggered as there was no bearish price action when either of the given resistance levels were first reached.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be entered before 5pm London time today.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $1.1624, $1.1671, or $1.1688.
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.
Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
Long Trade Ideas
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.1564, $1.1536, or $1.1517.
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.
Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
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 a bearish head and shoulders pattern was close to completing, with the neckline at $1.1574. I was looking for a short trade from either $1.1623 or $1.1668. However, the price pushed up past both resistance levels boosted temporarily by the ECB release that day, before turning bearish again at $1.1688. I was correct about the neckline at $1.1574 as that level continued to hold as support.
The technical picture now is slightly more bearish than it was a week ago even though the price has not moved by a great deal, mainly because the neckline at $1.1574 is no longer supportive.
We have continued though muted USD strength and EUR weakness. The price is not far from long-term lows, but has not yet made a significant bearish breakdown, which will take a daily close below $1.1529 to happen.
Another obstacle for bears is the fact that we have a few support levels sitting above the big round number at $1.1500 and these seem to be giving firm support, so it is unclear how much further the price is ready to fall if there is a breakdown.
I see the best approach today as waiting for the price to get back to $1.1624 and being prepared to trade short from a bearish reversal off that level, but I think this is not very likely to happen.
There is nothing of high importance due today concerning either the EUR or the USD.