EUR/USD Forex Signal - 31 January 2018

Wednesday, 31 January 2018 8:08

Yesterday’s signals were not triggered, as there was no bearish price action at 1.2388.

Today’s EUR/USD Signals

Risk 0.75%.

Trades may only be entered before 5pm London time today.

Long Trades

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2388 or 1.2330.

  • 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 ride.

Short Trades

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2500 or 1.2571.

  • 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 ride.

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 thought yesterday that the price was likely to fall further. In fact, after getting quite close to the support level at 1.2330, it turned around strongly and rose to make new highs, easily breaking up past the resistance level at 1.2388 and flipping it to become probable new support. The price then pulled back to this new support at 1.2388 which held, and at the time of writing it is rising again, looking like testing the previous swing high at 1.2450. The price might fail here again, but the signs are bullish, and the price is moving in line with the strong long-term trend. It should be noted though that the Euro is less strong than the Pound, which is potentially a slightly bearish sign.

I have a bullish bias, but as there is plenty of major news due later today, anything could happen during the later part of the New York session.EURUSD

Regarding the EUR, there will be a release of CPI Flash Estimate data at 10am London time. Concerning the USD, there will be a release of the ADP Non-Farm Employment Change at 1:15pm, followed by Crude Oil Inventories at 3:30pm, and the FOMC Statement and Federal Funds Rate at 7pm.

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.

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