EUR/USD: Slight bearish bias
Yesterday’s signals were not triggered as there was no bearish price action when the resistance level at 1.1823 was first reached.
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 1.1849, 1.1863, 1.1882, or 1.1897.
- Put the stop loss 1 pip above the local swing high.
- Move the stop loss to break even once the trade is 20 pips in profit.
- Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1786 or 1.1745.
- Put the stop loss 1 pip below the local swing low.
- Move the stop loss to break even once the trade is 20 pips in profit.
- Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
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 over the shorter-term, it seemed clear that the area around 1.1823 was going to be pivotal. However, I thought this would be more meaningful if we had gotten a bearish reversal there than if we had gotten a bullish break. I also noted there was a cluster of resistance levels above 1.1823 which would probably be hard to break.
This was a correct call, as the breakdown below 1.1823 did produce a mostly downwards movement over the rest of the day, but not by much.
The technical situation now is that there is no real trend, and the price seems stuck between an area of support below 1.1785 and the resistance levels above. However, it can also be noted that the price has continued to move down in waves over the past few days, so it may be that the line of least resistance is downwards.
I am prepared today to take a long trade from a bullish bounce at 1.1745 or a short trade from a bearish reversal at 1.1849.
There is nothing of high importance due today regarding either the EUR or the USD.