Last Wednesday’s signals produced a long trade off the large bullish doji candlestick which rejected the support level at 1.2343. This gave about 24 pips of profit.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may be taken before 5pm London time today only.
Short Trade
Go short following a bearish price action reversal on the H1 time frame immediately upon the next entry into the zone between 1.2300 and 1.2310.
Put 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.
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.
Long Trade
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2260.
Put 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.
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 wrote last Wednesday that if the price breaks below the support at 1.2343 it would be likely to signal a deeper pull-back within the long-term bullish trend. This is what happened. The price has fallen to touch and reject – at least so far – the support level at 1.2260, which is the last remaining support level above the big round number at 1.2000.
This pair is in an interesting position – it is close to breaking down from a relatively narrow price range which has held for about three months. This is significant and suggests that a major long-term trend reversal could be about to start. These pivotal points are always interesting, as if the support at 1.2260 survives, it could provide a low-risk long trade entry. A good long trade from this level might be worth holding onto in the hope of a large reward to risk gain, should the long-term bullish trend survive.
There is nothing due today concerning either the EUR or the USD.