Yesterday’s signals produced a profitable long trade following the bullish doji + outside candlestick combination rejecting the support level identified at 1.2208.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today only.
Long Trade
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2005.
Place the stop loss 1 pip below the local swing low.
Move the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
Short Trade
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2359.
Place the stop loss 1 pip above the local swing high.
Move the stop loss to break even once the trade is 20 pips in profit.
Remove 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
I was correct yesterday to maintain a bullish bias, as there was a bounce from an identified support level that gave quite a lot of pips of profit, for any trader nimble enough not to overstay in the trade. However, the price fell back to an area below that former support, and now the picture looks considerably more bearish. The price chart below shows we have a bearish head and shoulders pattern rejecting the 1.2300 area, which coupled with the break of the former support, presents a more bearish picture, despite the long-term bullish trend. Another factor is the relatively high volatility, which is usually not good for trading with the trend. Finally, we are a long way from any clear support or resistance levels which can be clearly identified. What this all adds up to is that it is extremely difficult to predict what is most likely to happen today, so I have no bias until tomorrow. The flow is now suggesting lower highs and lows are taking place, is the best that can be said.
There is nothing important due today concerning the EUR. Regarding the USD, there will be a release of Building Permits data at 1:30pm London time, followed by Crude Oil Inventories at 4pm.