EUR/USD Forex Signal: Bullish Breakout Regains Momentum

Adam Lemon

Last Thursday, the ECB talked about increasing stimulus to the Eurozone and this has helped boost the Euro which is in a slow but significant long-term bullish trend. 

EUR/USD: Beware long-term resistance near 1.1500

Last Thursday’s signals were not triggered as the key support level at 1.1371 was not hit until after London closed.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken before 5 pm 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 1.1517 or 1.1570. 
  • 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 1.1394, 1.1371, or 1.1321. 
  • 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

Last Thursday, the ECB talked about increasing stimulus to the Eurozone and this has helped boost the Euro which is in a slow but significant long-term bullish trend. Friday saw the price close at a new multi-month weekly high close, above 1.1400, and the price has continued to rise as this week opens.

There are two problems for bulls to consider, however: firstly, the USD is relatively strong, so it may be more profitable to take long trades in the Euro against a currency which is relatively weaker. Secondly, we have a major psychological level and round number just ahead at 1.1500 which may be hard to break.

I am happy to enter a long trade today from a bullish bounce which may happen at any of the support levels identified above. Scalpers may also be interested in a short trade from the first touch of 1.1500 or 1.1517.

EUR/USD

There is nothing of high importance due today regarding either the EUR or the USD.

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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