Last Tuesday’s EUR/USD signal produced a profitable long trade after strongly rejecting the support level identified at $1.1267, although the trade gave a maximum profit of only 40 pips.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered between 8am and 5pm London time today.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.1303 or $1.1393.
Put the stop loss 1 pip above the local swing high.
Adjust 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
Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.1250, $1.1229, or $1.1195.
Put the stop loss 1 pip below the local swing low.
Adjust 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 had become very consolidative, with the price moving less in this currency pair than in most others. I thought that the price was unlikely to move much over the day, so the only opportunity I saw here was for scalpers to scalp long from the support level at $1.1267.
This was an accurate and profitable call as the price did make a solid bullish bounce at $1.1267, giving an opportunity to take a nice long trade.
The technical situation now has changed little. The price is still very consolidative and moving with low volatility. However, the consolidation looks a little bearish and the long-term trend is bearish, so a breakdown below the current price area is looking more likely to happen than a breakout. The resistance level at $1.1302 continues to hold with a bearish double top, pushing the price down. We are seeing short-term bearish price action as we approach the end of the Asian session.
The problem for bears is that we have two support levels nearby that have been quite firm lately, with the nearest one right on the big quarter-number at $1.1250.
I think short trades will be more likely to generate more profit than long trades, but there could be opportunities today either long or short. I see the best approach as day trading reversals from any of the key levels on short timeframes today, in the absence of major news which would be strongly likely to move prices significantly. Trades short be monitored and exited on short timeframes, in fact, this pair will probably give scalpers an ideal trading environment today.
Regarding the USD, there will be a release of Final GDP data at 1:30pm London time, followed by CB Consumer Confidence and Existing Home Sales data at 3pm. There is nothing of high importance due today concerning the EUR.