EUR/USD Signal- Jan. 7, 2014
EUR/USD Signal Update
Yesterday’s signals were not triggered and expired. The price cut right through 1.3625 so there was no price action supporting a potential short trade there, and we can forget about that level.
Today’s EUR/USD Signal
Entry should be made between 9am and 5pm London time today only.
Short Trade 1
Enter short at the next bar break of an hourly pin or engulfing bar rejecting and closing below the resistance level of 1.3715. If this level is not touched and rejected by the same hourly bar, or if an hourly bar closes more than a few pips above this level, the trade is immediately invalidated and should not be taken.
Stop loss 1 pip below the local swing high.
Move the stop loss to break even when the trade is 40 pips in profit and let the trade ride.
Long Trade 1
Enter long at a touch of 1.3488.
Stop loss at 1.3453.
Take half of the position as profit at 1:1 reward to risk and leave the remainder to ride.
The action yesterday was a little unclear, though it ended bullishly. Despite that, we are still within a bearish channel that was established on 27th December. However, although we have broken down through some bullish trend lines, there are still two very long-term bullish trend lines below us that have held since the summer of last year, neither of which was touched since about 2 or 3 months ago. The support level at 1.3488 is confluent with the lower long-term bullish trend line, as well as being near the psychologically key round number of 1.3500 and today’s daily S3 pivot, so we are likely to get some kind of a bounce up down there. As we are currently a long way away from this price, I am recommending today as a touch trade.
Above us there is a likely resistance level at 1.3715 which has recently acted as both support and resistance. It is possible to trade short off the top of the bearish channel, but I am not recommending that as a signal.
Graphical technical analysis can be seen in the chart below:
There is important news today for both the EUR at 10am London time (Eurozone CPI Flash Estimate y/y) and the USD at 1:30pm (Trade Balance). Therefore this pair is likely to be active today.
- Currency Pairs