My previous EUR/USD signal on 12th September was not triggered as there was insufficiently bullish price action when the support level at $1.0719 was first reached.
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 $1.0771.
- 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 50 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 $1.0625, $1.0586, or $1.0551.
- 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.
EUR/USD Analysis
In my previous analysis of the EUR/USD currency pair, I wrote that I was ready to go short if we got two consecutive hourly closes below $1.0700, but I would look to exit at $1.0626 or even $1.0650.
This was a good call as I was correct to see $1.0700 as pivotal that day – the price never even reached the round number and made a bullish turn close to it.
The technical picture can be said now to be more bearish after yesterday’s release by the Federal Reserve, which was a bit of a hawkish surprise, in that the Fed made clear that they expect another rate hike in 2023, and only two rate cuts in 2024. This has sent the US Dollar firmly higher, reflected in the lower prices we have seen here, with the price reaching a new 3-month low some hours ago.
Despite this long-term low, the Euro is showing a little bit of relative strength, as the Dollar has made more progress against other currencies. As key technical factor is the cluster of support levels around the round number at $1.0600 with the nearest of those, $1.0625, continuing to hold as it is getting tested from above as we approach the London open.
As I write, it looks like we are getting a bullish rebound from this area. Anyone trading long needs to be very cautious, but I think there could be scalping opportunities on the long side today here, especially if we get another touch of $1.0625 later which gives another bullish bounce.
Regarding the USD, there will be a release of unemployment claims data at 1:30pm London time. There is nothing of high importance due today concerning the EUR.
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