My previous EUR/USD signal on 9th May was not triggered, as none of the key levels which I had identified were reached during that day’s London session.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be taken 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 $1.0835, $1.0848, $1.0871, or $1.0884.
- 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 50 pips in profit and leave the remainder of the position to ride.
Long Trade Idea
- Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0782.
- 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
In my previous analysis of the EUR/USD currency pair, I wrote that the wide range would probably again hold today, so trading a reversal from either the support level at $1.0920 or the resistance at $1.1089 should be acceptable trades.
This was a good call as the range did hold, but as neither of the extremes was reached, no trading signal was generated.
The technical picture has changed a lot over the past two weeks or so, with the US Dollar making a strong advance counter to its long-term bearish trend. After having shown relative strength, the Euro has weakened to the point where it is weaker than the British Pound, which is typically a bearish sign for the Euro.
Looking at the price chart below, we can see a clear succession of lower highs and lows, another sign of the medium-term bearish trend. However, we have seen price rises and the Asian session is still looking positive for the Euro, as well as new stairstep support at $1.0782.
Unfortunately for bulls, there are several resistance levels quite close together close by, starting at $1.0835. It will be a bullish sign if the price can get established above that level, and even if it does, it would be unlikely to rise much further.
I see the best opportunity which could set up in this currency pair today as a short trade following a firm bearish rejection of the resistance level at $1.0835.
There is nothing of high importance due today concerning either the EUR or the USD.
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