EUR/USD: New 2.5-year low price again reached yesterday
Yesterday’s signals were not triggered, as the bearish price action took place just above the resistance level at 1.0803 while 1.0825 was not reached.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered before 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 1.0825 or 1.0865.
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 Idea
Long entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.0700.
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 that the technical picture remained very bearish, and that I would take a bearish bias if we saw an hourly close below yesterday’s low. We did not get such a low close, but my basically bearish take was correct, and the dominant move of yesterday was downwards in line with the long-term bearish trend.
At the time of writing the price is breaking to a new 2.5-year low but is showing some reluctance to get much lower than the 1.0780 area. It still has room to fall, to at least 1.0750 and possibly even to 1.0700, in the near future. I will take a bearish bias today if we get a bullish retracement to the 1.0825 area with a firm bearish reversal there.
There is a strong bullish trend in the USD, so this is a great time to trade Forex, in line with that trend. Although there is likely to be an opportunity here, the USD/JPY currency pair has more momentum right now.
Concerning the EUR, the ECB will release its monthly Monetary Policy Meeting Accounts at 12:30pm London time. There is nothing of high importance due today regarding the USD.