EUR/USD Forex Signal: Bears Threatening Breakdown Below $1.0700

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My previous EUR/USD signal on 16^th August was not triggered as there was insufficiently bullish price action when the support level of $1.0900 was first reached.

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 $1.0731, $1.0747, or $1.0771.
• 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 Ideas

• Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.070 or $1.0626.
• 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 near-term price action would be choppy and hard to trade, with a long scalp from a bullish bounce at $1.0900 likely to be the best opportunity which might set up today.

There was a small bounce at $1.0900 when the level was first reached, but the action was not choppy, it was downwards.

The technical picture now is more bearish as the US Dollar has continued its long-term bullish trend over the past few weeks, and the US Dollar Index hit a new 4-month high yesterday. The Euro is not especially weak, but it is nearing multi-month lows against the Dollar.

We see support close below confluent with the round number at $1.0700, but what looks most interesting is the cluster of support levels above the round number at $1.0600, which represent multi-month low prices and the site of a very strong bullish reversal the last time it was reached. This area looks likely to be very pivotal again.

Due to the ongoing bearish trend, I will be ready to enter a new short trade today from any bearish reversal at a retracement to a resistance level, but I would exit as soon as $1.0626 is reached, as I expect that area to be supportive when it is next touched.

There is nothing of high importance due today concerning the EUR. Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time.

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