EUR/USD Forex Signal: Bullish Advance

Adam Lemon

EUR/USD: New 1-month high prices

Yesterday’s signals produced a nicely profitable long trade from the bullish rejection of the support level identified at 1.1767 right at the start of yesterday’s London session. The price is still advancing at the time of writing, so it is probably wise to try to hold on to any part of this trade that remains open.

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 1.1881 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 1.1819, 1.1803, 1.1789, or 1.1767. 
  • 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 if the price could get established above 1.1803 it had 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 was in this currency pair.

Therefore, I was ready to take a long trade if we had gotten two consecutive hourly closes above 1.1803 by 10 am New York time, and we did, which was a profitable approach.

The technical picture looks more bullish, with the U.S. Dollar retreating everywhere as risk-on sentiment gets a boost from more upbeat reports on negotiations over a second dose of economic stimulus for the U.S. economy. At the same time, the Euro has been relatively strong.

Technically, we are seeing several flips of former resistance to become new higher support levels in a classic bullish “stairstep” progression.

The outlook is bullish, and it seems likely that the next resistance level at 1.1881 will be reached today. If the price breaks above that level easily, that would be a very bullish sign. Buying dips below 1.1881 in the meantime is likely to be a good day trading strategy here.

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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