Last Tuesday’s EUR/USD signal produced a nicely profitable short trade from the bearish reversal at the resistance level identified at 1.1610.
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 time frame immediately upon the next touch of 1.1562, 1.1588, or 1.1610.
Put 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 Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1517.
Put 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
I wrote last Tuesday that the key technical event to look out for was whether the price could make a daily (New York) close below last week’s closing low at 1.1574. I was ready to go short if that had happened, but it did not.
I thought that waiting to see how the price reacted at 1.1588 was the correct approach and this level did act as support, giving an accurate early indication that over this day we were not going to see meaningfully lower prices. My calls on these levels were good and accurate. However, the key swing high was made off 1.1610 and swing or position traders could have used my accurate identification of this resistance level as a good entry point for a short trade, as yesterday saw the price fall with above-average volatility, boosted by the ADP NFP forecast which exceeded expectations.
We have a firm long-term bearish trend in this currency pair, driven mostly by the US dollar which is usually a good sign as to trend strength. The euro is the weakest major currency right now, so there are good reasons to be looking for short trades here.
We have a new flipped resistance level just above the current price at 1.1562. If this resistance level continues to hold, we are very likely to see lower prices today. There are no key support levels until 1.1517 so the price has room to fall. I am ready to take a short trade from a bearish reversal off 1.1562.
There is nothing of high importance due today concerning either the USD or the EUR.