EUR/USD Forex Signal: Bearish Momentum Continues

Adam Lemon

In this currency pair, we see more a case of a strong Dollar than a weak Euro, which gives some hope for a bullish rebound.

EUR/USD: Yet Euro is not relatively weak

Yesterday’s signals gave a long trade entry signal which produced a losing trade, after the bullish bounce at the support level of 1.1786.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken before 5pm London time today only.

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1828 or 1.1875.
  • 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

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1745, 1.1685, or 1.1624.
  • Place the stop loss 1 pip below the local swing low.
  • 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 when the price would hit the next support level, we would learn something significant. This was a good call as after a little initial support, the price was able to get established below 1.1786 and flip that level into acting as probable new lower resistance.

I also thought that a significant break below 1.1745 would be a significant bearish sign but that has not happened yet.

The Forex market is being driven by risk-off sentiment which is sending flow into the U.S. Dollar and Japanese Yen while hitting riskier currencies. However, in this currency pair, we see more a case of a strong Dollar than a weak Euro, which gives some hope for a bullish rebound.

I am still prepared to take a long trade if we get a strong bullish bounce at 1.1745 because this support level is confluent with a major quarter-number of 1.1750. A long trade here could have good medium-term potential for swing traders as we are near the lower boundary of the price range from the last couple of weeks or so, while we still technically have a long-term bullish trend adding impetus in that direction.

I am also prepared to take a short trade from a bearish reversal at 1.1828 if it sets up later.

EURUSD

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

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.