EUR/USD Signal- March 10, 2014

|

By: DailyForex.com

EUR/USD Signal Update

Last Thursday’s short signal to sell at around 1.3830 was triggered on Thursday. After moving about 20 pips in profit very quickly, it unfortunately turned around and took out the stop loss strongly, so this was a losing trade of -0.50%.

Today’s EUR/USD Signals

Risk 0.50%.

Entries may only be made between 8am and 5pm London time today.

Short Trade 1

Enter short after the next bar break of any bullish pin or engulfing hourly candle following the first touch of 1.3955. After one hour from the close of the first hourly candle that closes above 1.3955, this trade should not be taken.

Place a stop loss 1 pip under the local swing low.

Move the stop loss to break even at 1.3925. Take 50% of the position as profit at this level and leave the remainder to ride.

Short Trade 2

Enter short after the next bar break of any bullish pin or engulfing hourly candle following the first touch of 1.3975. After one hour from the close of the first hourly candle that closes above 1.3955, this trade should not be taken.

Place a stop loss 1 pip under the local swing low.

Move the stop loss to break even at 1.3925. Take 50% of the position as profit at this level and leave the remainder to ride.

Long Trade

Enter long with a buy limit order at the first touch of 1.3715.

Place the stop loss at 1.3680.

Take 75% of the position off as profit at 1.3820 and leave the remainder to ride.

EUR/USD Analysis

The pair responded very bullishly at the end of last week to the ECB’s statement. It was surprising to see the long-term bearish trend line from 2008 breach so easily at around 1.3830. There was a reaction but it only lasted for about 20 pips! We closed the week above that trend line, which is a very bullish sign.

Friday’s NFP was able to pull the price off its high but there was no real downwards follow-through, which is another bullish sign.

Despite this bullishness, there is likely to be strong resistance not far overhead. There is the 50% Fibonacci retracement level at 1.3955, a support flipped to resistance level at 1.3975 from October 2011, and the key psychological number at 1.4000. Due to these levels, I am still prepared to look for shorts, but will move stop losses to break even very quickly. The 1.3975 level is also fairly confluent with the upper trend line of the bullish channel we are currently established within.

There are several buying opportunities below but the closest solid supportive level that can be identified is at 1.3715, which is quite some way away, so I am looking for a touch trade there

Candlestick analysis shows bullishness on all the higher time frames. Watch to see whether the price manages to hold above the broken bearish trend line. If it does hold above it, that will be a very bullish sign.

EURUSD Signal 31014

There are no important data releases scheduled today concerning either the USD or the EUR, so it is likely to be a quiet day for this pair.

Adam is a Forex trader who has worked within financial markets for over 12 years, including 6 years with Merrill Lynch. He is certified in Fund Management and Investment Management by the U.K. Chartered Institute for Securities & Investment.
Learn more from Adam in his free lessons at FX Academy.