EUR/USD Forex Signal: Bearish Consolidation Below 1.0887

Adam Lemon

EUR/USD: Persistent buying below 1.0800

Yesterday’s signals produced a profitable short trade from the strong bearish reversal at 1.0887. The current short-term price action suggests that this winner is best left to run for at least a little longer.

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 1.0836 or 1.0887.

  • 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

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.0710.

  • 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.

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 was still prepared to take a short trade from a bearish reversal at 1.0887. This was a great call as the price made a strong bearish reversal there and provided a profitable short trade entry.

The technical picture is more bearish as the USD is the second strongest currency after the Japanese Yen due to increasing risk-off sentiment in the markets. However, although the Euro is weak over the long-term, it is not showing the same tendency to move down in the way that other risk currencies such as the British Pound are. So, although a new lower resistance level was printed on the way down, we still have a pattern of higher lows and highs below 1.0887.

For these reasons, I would prefer a conservative short trade, ideally from 1.0887 again, although I would also take a short trade from a bearish reversal at 1.0836 if any reversal there is strong.EURUSDThere is nothing of high importance due today concerning either the EUR or the USD.

About the Author
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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