Last Thursday’s signals were not triggered. Although the price did reach 1.3878, there was no confirmatory bearish price action required to give a short signal.
Today’s EUR/USD Signals
Enter only between 8am and 5pm London time.
Long Trade 1
Enter long with a buy limit order at the first touch of 1.3751.
Place the stop loss at 1.3713.
Move the stop loss to break even when the trade is in profit by 30 pips.
Take off 50% of the position as profit at 1.3815 and leave the remainder of the position to ride.
Short Trade 1
Enter short with a buy limit order at the first touch of 1.3949.
Place the stop loss at 1.3983.
Move the stop loss to break even when the trade is in profit by 35 pips and take 25% of the position off as profit.
Leave the remainder of the position to ride.
After several consecutive days of strong upward moves, Friday printed an indecisive doji, suggesting a pause or a pull-back might be due next. Then over the weekend the President of the ECB made comments widely interpreted as signalling that the Euro had gone high enough. The effect of this has been that the pair opened this week with a gap down of about 40 pips from last week’s close. Such gaps do tend to be filled fairly quickly, but due to the ECB’s comments and the fact that we already moved so far so fast, I am nervous of going long right away.
If the price falls from here, it is hard to say where it is going to find support before 1.3750 which should be a solid level. There is 1.3835 which is Thursday’s low. There is also the area around 1.3818 which is a GMT supportive pivot point confluent with an area of previous strong resistance.
Above us there is a long-term resistance zone between 1.3955 and 1.3976 which happens to be confluent with two major trend lines and the 50% retracement of a multi-year downwards move. We have already hit that 50% level, but the confluence is strong nevertheless. It is unlikely we will get up there today, but if so, it should be a good level for a short trade.
Below us 1.3750 is a long way away, and if we were to reach down there soon, there ought to be a bounce up.
I am not giving these as signals, but bullish price action at around 1.3818 might be the best bet for a day trader today with this pair. It is hard to tell what the pair will do next in any significant way after the ECB comments.
There are no high-impact news releases due today concerning the EUR. At 1:30pm London time there is a release of US Retail Sales and Core Retail Sales data. Therefore it may be a fairly quiet morning, and a little more buy during the New York session.