EUR/USD Forex Signal: Euro Bounces Back

Adam Lemon

We saw almost everything bounce back yesterday against the U.S. Dollar, and the Euro came back relatively strongly, which is a bullish sign for this currency pair.

EUR/USD: New higher support at 1.1800

Yesterday’s signals may have produced a short trade from the bearish price action which rejected the resistance level at 1.1828 right near the end of the London session yesterday. This trade is in a floating loss at the time of writing and it would probably be wise to exit from such a trade immediately.

Today’s EUR/USD Signals

Risk 0.75%.

Trades may only be entered between 8am and 5pm London time today.

Short Trade Ideas

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1875 or 1.1929. 
  • 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 1.1802 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.

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EUR/USD Analysis

I wrote yesterday that I was prepared to take a long trade if we got a strong bullish bounce at 1.1745 because this support level was confluent with a major quarter-number of 1.1750. The level was not quite reached but this did reflect what happened. However, I was also prepared to take a short trade from a bearish reversal at 1.1828 which did not work out so well.

We saw almost everything bounce back yesterday against the U.S. Dollar, and the Euro came back relatively strongly, which is a bullish sign for this currency pair.

Another bullish sign is that the price seems to be breaking above and invalidating the former resistance level at 1.1828.

Although I think it is quite likely that the price will continue to move up enough to reach at least 1.1875, the European Central Bank will be presenting its monthly statement today, which tends to induce volatility and cause unpredictable price action. Therefore, it may be best to avoid trading this currency pair today until after that release.

EUR/USD

Regarding the EUR, the European Central Bank will be releasing its Monetary Policy Statement and Main Refinancing Rate at 12:45 pm London time followed by the usual press conference 45 minutes later. There is nothing of high importance scheduled today concerningu6 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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