EUR/USD Signal- Jan. 2, 2014
EUR/USD Signal Update
Tuesday's signal was not triggered and expired.
Today’s EUR/USD Signal
Entry should be made between 9am and 5pm London time today only.
Long Trade 1
Enter long at the next bar break of an hourly pin bar rejecting and closing above the support level of 1.3712. The pin bar must open and close within the top third of its range and should be larger than any of the previous 5 bars. A strong inside or engulfing bar is also OK for entry. If this level is not touched and rejected by the same hourly bar, or if an hourly bar closes more than a few pips below this level, the trade is immediately invalidated and should not be taken.
Stop loss 1 pip below the local swing low.
Take the risk off the position at 1.3750 and let the position ride. Take profit rather than moving the stop loss to break even.
The uptrend in this pair was quietly maintained over the Christmas period with bullish trend lines holding but minor resistance being established at 1.3712, before spiking upwards dramatically by about 200 pips on Friday. Although the price quickly retreated from this spike, I agree with Christopher Lewis’ belief that the line of least resistance is still currently upwards, so we should take a long bias. Although the price fell yesterday, there is no reason to determine the uptrend as over, although it has certainly weakened considerably.
There is important news today for the USD at 1:30pm (Unemployment Claims) and 3pm (ISM Manufacturing PMI) London time which might well cause some movement.
I am prepared to look at a long trade confirmed by price action should we return to the previous resistance level of 1.3712 during the London session today, at least after 9am London time. Happily, today this level is quite confluent with a bullish trend line that has held for a long time, as well as today's S3 pivot.
There is resistance overhead from 1.3830. We are still in a bullish channel, as can be seen in the chart below:
- Currency Pairs