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EUR/USD Forex Signal: Weak Bullish Retracement

By Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

Support at $1,0899 looks pivotal today.

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My previous EUR/USD signal on 22nd June was not triggered, as there was no bullish price action when the price first reached the support level identified at $1.0963.

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 timeframe immediately upon the next touch of $1.0963 or $1.1029.
  • 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.
  • 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

  • Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0899, $1.0871, or $1.0848.
  • 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.
  • 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 previous analysis of the EUR/USD currency pair last Thursday, I wrote that the technical picture was looking more bullish, but also noted that the price had got close to the big round number at $1.1000 which recently acted as an area of strong resistance. Therefore, I thought there could be an opportunity either long or short – I was not sure which – from reversals at either $1.1029 or $1.0963.

The price reached the lower level but continued falling with no bounce, so this was not a great call, but it was at least enough to prevent any losing trades.

The technical picture now is less bullish after we saw a move down from the $1.1000 area over recent days and a stronger US Dollar. However, since bouncing at the support level at $1.0848, the price has been ascending weakly in what looks like a bullish retracement – the impulsive movement seems to be downwards.

The price is now rising weakly from the support level at $1.0899 which is very confluent with a round number, and there are two further support levels quite close below that, suggesting the line of least resistance is upwards.

I think that if the price again rejects $1.0899 bullishly after the London open, there could be a long scalping opportunity here, but the price is unlikely to move much today as it seems set to be a very quiet Monday.

EUR/USD

There is nothing of high importance due today regarding either the EUR or the USD.

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Adam Lemon
About Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

 

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