EUR/USD: Key support at 1.0889
Yesterday’s signals produced a losing long trade from 1.0933.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered before 5pm London time today.
Short Trade Idea
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.0968.
Place 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 20 pips in profit and leave the remainder of the position to run.
Long Trade Idea
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.0889.
Place 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
I wrote yesterday that technically the price was still within a long and medium-term consolidation zone and pattern here, but we were beginning to see bearish momentum. This was a good call as the price moved down further over the day. I also thought that if the price could get established below 1.0889 later that would be a very bearish sign. It is notable that the price has not descended far enough to touch that support level yet. So, we have a bearish situation, but only weakly bearish. We also have new lower resistance at 1.0968.
I think the price will today move a bit lower and is very likely to reach 1.0889 which should be a very pivotal point. I would take a long trade from a bounce there as the level is likely to be strong, but the Euro is relatively weak so this should be monitored carefully on a short time frame. A better set up would be taking a bearish bias if the price can get established today below 1.0889 as there is no support until 1.0710 or maybe a bit higher at 1.0750.
There is nothing of high importance scheduled for today concerning the EUR. Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time.