EUR/USD Forex Signal: Weaker Euro

Adam Lemon

EUR/USD: Medium-term bullish trend in doubt

Yesterday’s signals were not triggered, as there was no bullish price action when either of the support levels identified at 1.1790 or 1.1760 were first reached.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken between 8 am and 5 pm London time today only.

Short Trade Ideas

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1752, 1.1779, or 1.1803. 
  • 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 1.1726 or 1.1684. 
  • 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.

EUR/USD Analysis

I wrote yesterday that the medium-term bullish trend was surviving and the support at 1.1790 looked likely to be today’s pivotal point. I also thought the price would rise over the day, which I was wrong about. However, 1.1790 as a pivotal point was a good call as after breaking below that level, the action over the past day was firmly downwards.

Yesterday’s Forex market action was dominated by a weakening of both the British Pound and the Euro even more than it was about strengthening in the U.S. Dollar. This is partly caused by an increasing prospect that a comprehensive trade deal will not be achieved between the U.K. and the E.U.

The action here was showing a medium-term bullish trend but that is in serious doubt now, with the price seeming to have got established below the big quarter-number at 1.1750.

I think the price is now is a more ranging environment and is likely to seesaw backwards and forwards, so I have no probability for overall direction.

There is short-term bearish momentum at the time of writing, so I think it is likely that 1.1726 will be reached.

I will take a short from a bearish reversal at 1.1752 or a bullish reversal at 1.1684 if either of these situations set up.

EUR/USD

There is nothing of high importance due today regarding the EUR. Concerning the USD, there will be a release of PPI data at 1:30 pm London time.

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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