EUR/USD Signal Update
Last Thursday’s signals expired without being triggered as the price did not reach either 1.3878 or 1.3715 before the London close.
Today’s EUR/USD Signals
Risk 0.50%
Entry between 8am and 5pm London time today only.
Long Trade
Touch trade with a buy limit order at 1.3650.
Stop loss at 1.3615.
Move the stop loss to break even when the trade is 25 pips in profit.
Take 25% of the position as profit at 1.3690 and leave the remainder to ride.
Short Trade
Touch trade with a sell limit order at 1.3878.
Stop loss at 1.3913.
Move the stop loss to break even when the trade is 25 pips in profit.
Take 75% of the position as profit at 1.3805 and leave the remainder to ride.
EUR/USD Analysis
In my analysis last Thursday I was looking for the price to find support at the 1.3715 level for a potential long. The price did not get down there that same day, but the following day saw a nice bounce from just a few pips below that level. In fact, if you take a look at the chart below, you can see it was an exact bounce off the bullish trend line that was confluent with that level.
As we have just been down to that support zone, I will not be looking for a long there again today should the price fall back. Instead I have to look to the likely support below that zone, which would be at the 1.3650 level. As this is approximately 100 pips from the current price at the time of writing, I would look for a touch trade there even though Yellen is speaking later today.
Above us there are a couple of trend lines that have recently acted as resistance, and the better one (which is the broken bullish trend line) is exactly confluent with likely resistance at 1.3878, so in the unlikely event that we spike 130 pips or so up there before London closes, it would be an excellent opportunity for a short touch trade.
The overall picture is as it almost always seems to be with this pair: moving pretty evenly between support and resistance, backwards and forwards. I have more faith in a bearish than a bullish bias, as we peaked off a high which bounced down from a long-term 50% Fibonacci level at 1.3955 recently, confluent with a very long-term bearish trend line.
A candlestick analysis of the higher time frames shows a bearish picture, but the daily chart is suggestive of a short-term move upwards.
Today there is the EUR-related CPI Flash Estimate Data release at 10am London time. Later on at 2:55pm the Chair of the Federal Reserve will be speaking at a conference and her remarks could impact the USD. Despite these events it is fairly likely that today will be relatively quiet.
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