My previous EUR/USD signal on 7th October was not triggered.
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 $1.0845, $1.0873, or $1.0897.
- 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 $1.0807, $1.0779, or $1.0755.
- 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.
- Adjust 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 EUR/USD analysis three weeks ago, I wrote that there was a bearish environment with heavy price action suggesting that the pivotal point at $1.0947 would be tested and likely broken. As it happened, that support level held for the day but broke down days later.
We have seen the price of this currency pair decline over the past month on relatively low volatility after making a bearish double top at $1.1200, with the price recently reaching a new multi-month high.
However, recent days have seen the bearish momentum slow down and possible even halt, maybe because the US Presidential and Congressional elections are only one week away now, and markets are waiting to react to the result when it becomes clear (that might take a few days or even weeks following election day on 5th November).
For this reason, and because the bearish trend is prematurely overextended, I think the best way to trade this currency pair now is to try to play a range. The consolidatory environment is reinforced by the narrowing triangle formation shown within the short-term price chart below.
So I see the best strategy as cautiously trading reversals at either key support or resistance levels, especially the ones outside the triangle, but it will probably be important to be conservative in taking profit.
Concerning the USD, there will be releases of CB Consumer Confidence and JOLTS Job Openings data at 2pm London time.There is nothing of high importance due today regarding the EUR.
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