EUR/USD Forex Signal: Bullish Trend Line Breakout

Adam Lemon

EUR/USD: Break above 1.1803 would be a bullish sign

Yesterday’s signals were not triggered as there was no bearish price action at any of the three resistance levels which were reached.

Today’s EUR/USD Signals

Risk 0.75%.

Trades may only be entered before 5 pm London time today.

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1789 or 1.1803. 
  • 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 1.1767, 1.1741, or 1.1684. 
  • 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 price looked likely to continue to fall very slowly to hit the nearest support level at 1.1684. I was wrong about that and I was also wrong about seeing the better opportunity for swing traders as short from bearish reversals at 1.1741 or higher.

What stands out technically is the sudden strength we saw in the Euro yesterday, on a day when non-U.S. Dollar currencies were generally weakening. However, there is no long-term trend, so we cannot really make too much of this.

Yesterday’s upwards movement has been capped by an area of resistance which tops just above 1.1800, confluent with that round number.

This area may hold today, but if the price can get established above 1.1803 it has plenty of room to rise, and sometimes strong days such as yesterday can follow through the next day even when the price is right in the middle of a long-term range, as it is in this currency pair.

I am prepared to take a short trade from a firm bearish reversal at 1.1803, or a long trade, if we get two consecutive hourly closes above 1.1803 by 10, am New York time.

EUR/USD

There is nothing of high importance due today concerning either the USD or the EUR.

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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