EURUSD: Bullish breakout beyond 1.1113
Yesterday’s signals produced an excellent and nicely profitable long trade from the bullish bounce at 1.1071. It may be time to exit from this position soon with profit as the rise has slowed down.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today only.
Short Trade Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1198.
Place 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 run.
Long Trade Ideas
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1113.
Place 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 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 the resistance level at 1.1113 looked strong. I did not have much confidence that the support level at 1.1071 would have much effect if it is reached. This was a bad call and I was completely wrong, as the support level at 1.1071 provided an excellent long entry after holding and the price easily broke up past 1.1113.
The technical picture is much more bullish, as although the price remains within its multi-week range, it made a strong move yesterday against a weaker U.S. Dollar. The price has continued to hold up firmly near its recent highs, so the Euro looks generally quite strong.
This suggests that a bullish bias makes sense now, but there are two problems with that approach. Firstly, the ECB will be making its monthly policy release today, which could have an unpredictable impact upon price movement. Secondly, the resistance near 1.1200 marks a long-term high price which might not break easily. A further complication is the British general election taking place today, which could also impact the value of the Euro as the election result will determine whether Brexit happens quickly or even at all.
This means traders should be cautious today, especially around the time of the ECB release and the British exit poll at the end of the day. Yet I do see the best potential here as in taking a bullish bias on this pair until the 1.1200 area is reached.
There is nothing of high importance due today concerning the USD. Regarding the EUR, there will be a release of the European Central Bank’s Monetary Policy Statement and Main Refinancing Rate at 12:45pm London time, plus the usual press conference 45 minutes afterwards.