My previous EUR/USD signal on 7th December was not triggered as there was insufficiently bearish price action when the resistance levels were first reached that day.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered 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 $1.0773, $1.0815, or $1.0848.
- 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 Idea
- Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0726.
- 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 last Thursday, I wrote that the technical picture had become more bearish, with both a relatively strong US Dollar and a weak Euro, which had been pushing the price down quite firmly over the past few days.
However, I also noted that the area around $1.0750 which the price had almost reached had typically been pivotal during recent months, so a bullish bounce here was very possible.
This is what we have seen, with the price seeming to bottom out and slowly turn in the $1.0750. The price is now rising bullishly to threaten the nearest resistance level at $1.0773.
I think if we get two consecutive higher hourly closes above $1.0773 following the London open, the price will be likely to continue rising to $1.0815. If the price closes above $1.0815 at the end of the New York session, that would be a very bullish sign and suggest an important bullish reversal has taken place.
Alternatively, if the price falls to close below $1.0773, that will be a bearish sign.
Trading today is complicated by the fact that the US inflation data release near the start of the New York session could cause a lot of directional volatility, so traders should beware of that.
Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time. There is nothing of high importance scheduled today concerning the EUR.
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