EUR/USD Forex Signal: Weakly Bullish

Adam Lemon

The dollar regained some strength last week, but the Euro held up relatively well as the Euro is quite strong, and certainly in a long-term bullish trend. 

EUR/USD: Short-term triangle formation

Last Thursday’s signals were not triggered, as there was no bearish price action when the resistance level at 1.1875 was first reached.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken before 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 1.1874 or 1.1929. 
  • 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 or 1.1786. 
  • 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.

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EUR/USD Analysis

I wrote last Thursday that despite the major ECB release scheduled could create volatile and unpredictable price movement, I thought it was quite likely that the price would continue to move up enough to reach at least 1.1875. This was a good call as the price briefly got even higher before falling back.

The dollar regained some strength last week, but the Euro held up relatively well as the Euro is quite strong, and certainly in a long-term bullish trend. The problem for bulls is that the price movement here is finding it hard to exceed the big round number and psychological level at 1.2000. So even though the Dollar is weakening and the price inching up slowly, we still have a consolidation between about 1.1750 and 1.2000.

The short-term price action is weakly bullish but consolidative over the slightly longer medium-term, evidenced by the consolidating triangle formation which is shown within the price chart below.

I take a slightly bullish bias, but I see that bulls and bears are very evenly matched. Therefore, I am only interested today in a long trade from a bullish bounce at either of the two support levels identified earlier.

EUR/USD

There is nothing of high importance scheduled today concerning 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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