EUR/USD: Support at 1.0840 looks strong
Yesterday’s signals were not triggered, as there was insufficiently bullish price action when the support level at 1.0971 was reached yesterday.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 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 1.0923 or 1.0971.
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 bullish price action reversal on the H1 time frame immediately upon the next touch of 1.0840.
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.
EUR/USD Analysis
I wrote yesterday that the picture had become more bearish today, as talk of new U.S. tariffs on China plus the beginning of corporate earnings season in the U.S. seemed to have boosted safe haven assets such as the USD and the Japanese Yen. I thought that the support level at 1.0923 would be pivotal but I was not seeking a long trade there. This was a good call as the price moved down over the course of yesterday and also got established below the support level at 1.0923 which I was wary of.
Markets seem relatively quiet today and will probably remain so until the New York session as we have some key USD data due. The price is consolidating below the new probable resistance level at 1.0923 and the short-term action suggests that the price is a little more likely to move down that up today, so a strong bearish reversal from 1.0923 could give a short trade entry opportunity and I would take it.
The nearest support level at 1.0840 looks like it is part of a strong structure, so I expect it is likely to hold when reached.
Concerning the USD, there will be a release of ISM Non-Manufacturing PMI data at 3pm London time. Regarding the EUR, there is nothing of high importance due today.