My previous EUR/USD signal on 9th June produced an excellent, nicely profitable short trade from the rejection of the descending trend line near $1.0800.
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 timeframe immediately upon the next touch of $1.0545 or $1.0600.
- 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 50 pips in profit and leave the remainder of the position to run.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0457 or $1.0426.
- 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 on 9th June that the price was consolidating within a narrowing triangle chart pattern. It was worth keeping in mind that the first breakout after the ECB release will not necessarily be the decisive one, and that the long-term trend was still bearish.
This was a good call as we got a decisive bearish breakdown from the narrowing triangle pattern following the ECB’s release.
The technical picture now is quite evenly balanced, with two support and two resistance levels quite evenly spaced either side of the current price.
The price action is a bit bearish, and we see the US Dollar advancing, but this could easily reverse as the London session gets underway. If Dollar strength continues, we will likely see the price continue to trade downwards until it reaches $1.0457.
I think the best approach to trading this currency pair today will be to seek to scalp a reversal relatively early in the London or New York session from $1.0457 or $1.0545, and then monitor the trade closely on a short time frame.
There is nothing of high importance due today regarding either the EUR or the USD.