Yesterday’s signals produced a profitable long trade following the bullish rejection of the support level at 1.1732.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken before 5pm London time today only.
Short Trade
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1732.
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.
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 Trades
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1659 or 1.1609.
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.
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 yesterday that it was quite likely there would be only minor movements today during the London session, with the market looking to the major FOMC releases later which should bring more volatility and possibly direction. This was a good call as what happened reflected it, although it took some hours for the price to make the crucial break below the major support level at 1.1732 which we can now expect to become new resistance. After the initial fall, the price seems to be being held at an old trend line, shown in the price chart below. The picture is more bearish and the highs above at 1.1800 have historically been pivotal. Much will probably now depend on the U.S. GDP data due later: if it is strongly positive, we can expect the price to continue to move down with some healthy momentum.
Regarding the USD, there will be releases of Core Durable Goods Orders and Final GDP data at 1:30pm London time. Concerning the EUR, the President of the ECB will be speaking at a minor conference at 2:30pm.