EUR/USD: Price stabilizes ahead of FOMC release due later
Yesterday’s signals were not triggered as there was no bearish price action when the resistance level at 1.1924 was first reached.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken prior to 5 pm 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 1.1853, 1.1881, 1.1929, 1.1964, or 1.2005.
- 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 1.1802, 1.1786, or 1.1745.
- 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 the Euro was one of the strongest major currencies, while the U.S. Dollar had begun to weaken more strongly.
I thought that the outlook looked bullish. The highest multi-month closing price was 1.1935 and I thought this could be exceeded yesterday.
This was not a great call as after peaking at 1.900 early in the London session, it spent the day falling, and ended up established below the anticipated support level at 1.1854. However, waiting for a bounce at that level before going long was at least enough to keep out of trouble.
It is clear from the price chart below that the broad consolidation between 1.1750 and 1.2000 continues as it has for a few weeks, and we see a narrower consolidation within that wider range over the past few days between the round numbers at 1.1800 and 1.1900.
The price is likely to continue ranging today ahead of the most important U.S. data release in the month’s Forex calendar. Therefore, I would look to take a long trade from a bounce at a support level at 1.1802 or lower or a short trade from a bearish reversal at 1.1929 or 1.2000.
Regarding the USD, there will be a release of Core Retail Sales data at 1:30 pm London time. The Federal Reserve will be releasing their Economic Projections, Statement, and Federal Funds Rate at 7 pm followed half an hour later by the usual press conference. There is nothing of high importance scheduled today concerning the EUR.