My previous EUR/USD signal on 20th November was not triggered as there was insufficiently bearish price action when the resistance level at $1.0945 was first reached that day.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today only.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0771, $1.0805, or $1.0848.
- Put 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 50 pips in profit and leave the remainder of the position to run.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0726 or $1.0653
- Put 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
In my previous analysis of the EUR/USD currency pair on 20th November, I wrote that the technical picture was quite bullish so I was looking to the long side. Nothing set up that day, but the major move was upwards so I was right about that.
The technical picture has since become more bearish, and we now have both a relatively strong US Dollar and a weak Euro, which has been pushing the price down quite firmly over the past few days.
There is no long-term trend, the price has been moving in wide ranges over the past few months.
The medium-term trend is bearish, caused by renewed conviction that the ECB will begin cutting rates in 2024, and new strength in the US Dollar.
The price chart below shows that the price has been descending in even stairsteps, flipping former support levels to resistance.
Despite this generally bearish technical picture, it is notable that this area around $1.0750 which the price has almost reached has typically been pivotal during recent months, so a bullish bounce here is very possible.
It is problematic to call direction in this currency pair, so scalp trades from reversals either long or short from key levels are probably the trades to look for. I prefer short trades to long trades here as we do have a medium-term bearish trend.
Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time. There is nothing of high importance scheduled today concerning the EUR.
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