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EUR/USD Forex Signal: Consolidation Below $1.0800

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.

My previous EUR/USD signal on 15th April was not triggered, as unfortunately the bullish price action took place just below the support level at $1.0611.

Today’s EUR/USD Signals

  • Risk 0.75%.
  • Trades may only be taken between 8am and 5pm London time today.

EUR/USD Signal Today - 13/05: Below $1.0800 Hold (Chart)

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0799, $1.0848, or $1.0872.
  • 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 $1.0758, $1.0739, or $1.0723.
  • 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 about one month ago, I said that although the technical picture was a little more bearish, I thought that the price was likely to range between $1.0610 or $1.0699. I was basically correct, although the price action did not respect the support at $1.0610 precisely.

The technical picture is still consolidative, with the price continuing to trade sideways between $1.0800 and $1.0723. The shift to $1.0723 as a base for this range a few days is a weakly bullish development. Therefore, it makes sense to take a weak bullish bias, which suggests that a long trade from a bullish bounce from a nearby support level such as $1.0758 would be the best potential opportunity today.

However, the resistance confluent with the round number overhead at $1.0800 looks very strong, so it might be wise to take at least some profit at that level to make sure the trade gives a small overall profit whatever happened next.

Today’s major pivotal point looks likely to be $1.0800. Other opportunities which might set up today would be a short trade from a bearish reversal at $1.0800 if it is hit, or a long trade following a bullish breakout beyond $1.0800.

I think the range between $1.0800 and $1.0723 is likely to hold today in the absence of any major scheduled data releases, and as it is a Monday which is typically a quiet day of the week in the Forex market.

There is nothing of high importance scheduled today concerning either the EUR or the USD.

Ready to trade our daily Forex signals? Here is a list of the top Forex brokers worth checking out.

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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