EUR/USD Forex Signal: Triple Bottom at 1.1195

Adam Lemon

Risk sentiment has soured a little which is boosting the U.S. Dollar, and this could help to cause a breakdown later below 1.1195.

EUR/USD: Bearish consolidation pattern

Yesterday’s signals produced a profitable long trade worth about 40 pips maximum from the bullish bounce at the support level identified at 1.1195.

Today’s EUR/USD Signals

Risk 0.75%.

Trades may only be entered before 5 pm London timetoday.

Short Trade Ideas

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1289, 1.1311, or 1.1354. 
  • 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

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1195 or 1.1155. 
  • 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 I did not see any good potential opportunities here with the exception of a potential long trade from a bullish bounce off the support level at 1.1195. I generally expected the price would consolidate.

This was an excellent call as the price action did give a profitable trade from a bullish bounce at 1.1195 just as I had expected it might, while the wider consolidative pattern continues.

I see the fact that the bounce from the now triple bottom at 1.1195 has been quite small as making the technical picture a little bearish although essentially still consolidative. Risk sentiment has soured a little which is boosting the U.S. Dollar, and this could help to cause a breakdown later below 1.1195.

A break below 1.1195 could well cause a quick move down to the next support level at 1.1155, so I am prepared to take a bearish bias later if we get two consecutive hourly closes below 1.1195 and 1.1175 targeting take profit at 1.1155.

EUR/USD

There is nothing of high importance scheduled today regarding the EUR. Concerning the USD, there will be a release of the ADP Non-Farm Employment change forecast at 1:15 pm London time.

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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