My previous EUR/USD signal last Wednesday was not triggered, as there was no bearish price action when either of the resistance levels which I had identified that day were first reached.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered before 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 $1.0146 or $1.0195.
- 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 $1.0061 or $1.0032.
- 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
In my last analysis of the EUR/USD currency pair on 7th September, I thought that despite the very strong US Dollar, the Euro was holding up from $0.9900 and so there was probably not much more downside left and it would be best not to trade this pair short that day. This was a good call, as the price completed a double bottom that day just a pip or so off its long-term low, and then began rising.
The long-term bearish trend in this currency pair remains valid, but relative strength in the Euro has continued as the Dollar weakens slightly or consolidates. This was probably aided by the 0.75% rate hike made by the ECB last Thursday, although that move was widely expected.
This currency pair is prone to making deep retracements within trends, which is a reason to be cautious on any bullish approach here. However, it is significant that the price is continuing to establish new higher support levels, while it invalidates some former resistance levels. These levels are good benchmarks to use in evaluation medium-term trends.
The key pivotal point for today looks likely to be the support level which I have identified at $1.0032. A long trade from a bullish bounce here could be interesting as a short-term trade, and if the price does not decisively break below this level, the technical outlook here should remain at least weakly bullish.
I think it is also valid to look for a short trade from a strong bearish reversal at $1.0146 if it is reached later.
There is nothing of high importance due today concerning either the EUR or the USD.
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