EUR/USD Forex Signal: Bullish Above 1.1964

Adam Lemon

A bearish reversal here could be a good long-term short trade, but its odds of success are not strong.

Last Thursday’s signals produced a nicely profitable long trade entry from the bullish bounce off the support level identified at 1.1887. It will probably be a good idea to exit from any remainder of this trade if the price gets established below the new closest support level at 1.1964 today.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken before 5pm London time today only.

Short Trade Idea

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2005.

  • 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 1.1964, 1.1919, or 1.1882.

  • 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 last Thursday that after bullishly breaking above the former key resistance level at 1.1929 and closing at a new 50-day high, the price had a free run to reach the next resistance level at 1.1964.

This was a good call as I was looking to buy on a dip and the support near 1.1880 gave a good opportunity. The price then rose to reach 1.1964 as I had expected, then closed Friday at a 2.5-year high closing price.

I also noted there is a confluence of horizontal resistance at 1.2005, and the huge round number at 1.2000 – and thought it would be hard for the price to break above this area soon.

My analysis is still valid as the new high close Friday and the fact the price is trading above 11964 suggest that in line with the overall weakness of the U.S. dollar, the price is now likely to rise to test the 1.2000 area. I still think a bearish reversal here could be a good long-term short trade, but its odds of success are not strong. On the other hand, if we see the price get established above 1.2000 and break the recent swing high at about 1.2015, that would be a very bullish development suggesting that this rise could continue to 1.2500.

EUR/USD

The President of the ECB will be giving a minor speech at 10am London time. There is nothing of high importance scheduled today regarding 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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