Yesterday’s signals gave a profitable short trade just after the London open following a bearish outside candle rejecting the resistance level identified at 1.0712. At the time of writing it looks as if the price will continue to fall, so it is probably a good idea to stay in the trade if possible.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be taken between 8am and 5pm London time today.
Long Trade 1
• Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.0627.
• Put the stop loss 1 pip below the local swing low.
• Adjust the stop loss to break even once the trade is 20 pips in profit.
• Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
Short Trades
• Go short following a bearish price action reversal on the H1 time frame immediately upon the next entry into the zone between 1.0712 and 1.0724.
• Put the stop loss 1 pip above the local swing high.
• Adjust the stop loss to break even once the trade is 20 pips in profit.
• Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
EUR/USD Analysis
This pair has been threatening to carve out a bottom close to 1.0500 and turn bullish despite the long-term bearish trend. At the end of last week this finally happened, with the bullish bounce off support at 1.0525 forming the last leg of a Quasimodo / under and over pattern, and from there the price moved up very strongly, boosted by the market’s reaction to the NFP numbers on Friday, which produced a sell-off in the USD.
The price has already hit key resistance at 1.0712 and may be held here, at least for a while, but it pays to be cautious after such a strong bullish move which changed the technical picture quite a lot. However, after the price cools off it may well fall from here, at least temporarily.
There is nothing due today regarding the EUR. Concerning the USD, there will a release of PPI data at 12:30pm London time.