Yesterday’s signals produced a profitable short trade from the bearish rejection of the resistance level identified at 1.2293, which ran for a little more than 30 pips before turning around.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today only.
Short Trade
· Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2330.
· 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 wrote yesterday that we may be seeing a basing consolidation and the beginning of an upwards movement in line with the still existing long-term bullish trend. However, there is plenty of resistance close to the current price… there is a good chance these levels will hold, especially if there is a failed test relatively early in the London session. This turned out to be completely correct, with the price initially rejecting 1.2293 and moving down before recovering. The New York close saw a change, with the price breaking up beyond the resistance at 1.2293, and the picture now looks much more bullish, with a bullish basing pattern clearly visible in the chart below 1.2300, and the price rising to make new highs. This is a change in atmosphere, with the Euro looking stronger than the U.S. Dollar, and stronger than the British Pound, but not as a strong as the Japanese Yen. Unfortunately, there are no obvious key support levels, but the price is likely to reach 1.2330, and the reaction there is likely to determine what will happen next. A break above that level will make the picture more bullish.
There is nothing due today concerning either the EUR or the USD.