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EUR/USD Forex Signal: Ongoing Consolidation Below $1.0872

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.

Consolidation below $1.0872, awaiting breakout. Current analysis suggests potential long trades at $1.0825 or shorts at $1.0872.

My previous EUR/USD signal on 19th February was not triggered as none of the key support or resistance levels were reached that day.

Today’s EUR/USD Signals

  • Risk 0.75%.
  • Trades may only be taken before 5pm London time today.

EUR/USD Signal Today - 05/03: EUR/USD Below $1.0872 (Graph)

Short Trade Ideas

  • Go Short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0872 or $1.0932.
  • 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 20 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 $1.0825, $1.0790, or $1.0744.
  • 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.

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EUR/USD Analysis

In my previous analysis of the EUR/USD currency pair on 19th February, I wrote that the price remained within a medium term bearish price channel, which has more weight as it is symmetrical. I thought that a short trade from the $1.0800 area would be the best opportunity which might set up.

I was correct that day about the price trading generally lower, but the $1.0800 level was never reached.

The technical picture now has become marginally more bullish, as the price has broken out of that bearish channel, but there has been no real bullishness. All we see is a dull consolidation with low volatility between $1.0800 and $1.0872.

It does feel that we might be poised eventually for a bullish breakout beyond $1.0872, but I think this is very unlikely to happen today.

I think the best approach today would be to look for a long scalp from $1.0825 if reached, or a short scalp from $1.0872 if reached.

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

Ready to trade our daily Forex signals? Here is a list of the best brokers offering Forex and CFDs for you to review.

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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