Last Thursday’s signals may have provided both a profitable long trade entry from the bullish candlestick rejecting the support level identified at 1.2369 and a short trade entry from the very large doji candlestick which rejected the resistance level at 1.2436. It would probably be wise to exit the remainder of the short trade immediately.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today only.
Short Trades
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2369 or 1.2436.
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.
Long Trades
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2284 or 1.2252.
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.
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 last Thursday that I had a bullish bias due to the long-term bullish trend, yet the price could easily make a strong bearish move. I was correct in this, as the price made strong movements in both direction, first the bulls, then the bears. The key support and resistance levels I chose acted perfectly as reversal levels, giving opportunities to profit on both the long then the short side. The price now seems to have based bullishly off the support at 1.2284 and is poised to rise gently. The resistance level at 1.2369 may be especially strong, as it is confluent with a trend line which still exerts influence when touched. However, the bullish action does not look strong or convincing, so a weak consolidation is quite possible over the short term. There is still a long-term bullish trend.
There is nothing due today concerning either the EUR or the USD.