EUR/USD Forex Signal: Very Bearish

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EUR/USD: 2.5-year low at 1.0879 under threat

Yesterday’s signals were not triggered, as there was no bullish price action when 1.0941 was reached.

Today’s EUR/USD Signals

Risk 0.75%.

Trades may only be entered between 8am and 5pm London time today.

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.0941 or 1.0972.

  • 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

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.0904 or 1.0865.

  • 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.

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EUR/USD Analysis

I wrote yesterday that we had long-term lows below 1.0993 and the outlook technically remained bearish in every way: we were most likely to see a further downwards move over the coming days. This was a great call as the price continued for yet another day to move down to new lows, breaking cleanly and strongly below the support level I had identified at 1.0941.

At the time or writing the price action looks very bearish and the next support level at 1.0904, confluent with the round number at 1.0900, is being tested and looks likely to break down.

The odds remain in favour of another down day, but bears should beware the 2.5-year low at 1.0879 as well as the key support level just below that at 1.0865, either of which could produce strong profit-taking and a major bullish bounce and retracement.

If the price can get established today clearly below 1.0865, that would be a very bearish sign, and suggest a further fall, maybe rapidly, to the psychological level at 1.0750.EURUSDRegarding the EUR, the President of the ECB will be giving a minor speech before the European Parliament at 2pm London time. Concerning the USD, the Chair of the Federal Reserve will be testifying before Congress at 3pm.

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