EUR/USD Forex Signal: Bearish Breakout - 10 February 2020

Adam Lemon

EUR/USD: New long-term lows below 1.0993

Last Thursday’s signals were not triggered, as there was insufficiently bullish price action when the support levels at 1.0993 or 1.0966 were reached.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken before 5pm London time today only.

Short Trade Ideas

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.0972, 1.0993, or 1.1014.

  • 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.

  • Remove 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 Ideas

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.0941, 1.0904, or 1.0865.

  • 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.

  • Remove 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 Thursday that this pair was looking close to perhaps making a really significant technical breakdown below 1.1000, and so I was prepared to take a short trade if we had gotten two consecutive hourly closes below 1.0993 by the time New York had been online for an hour.

This was a good call although a little bit late, it took about two hours, but we did get this significant bearish breakdown below 1.0993 and the price has fallen from there now by about another 50 pips, helped by general strength in the USD and stronger than expected NFP data on Friday.

We have long-term lows below 1.0993 and the outlook technically remains bearish in every way: we are most likely to see a further downwards move over the coming days. Therefore, taking short trades at pullbacks to the key resistance levels detailed above and shown in the price chart below, provided there are firm bearish reversals, must be the best strategy here.

EURUSD

There is nothing of high importance due today regarding either the EUR or the USD.

Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.
Learn more from Adam in his free lessons at FX Academy

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