EUR/USD Forex Signal: More Bearish

Adam Lemon

Head & shoulders pattern breaks down.

Yesterday’s signals produced a losing long trade from a bullish bounce at 1.1767.

Today’s EUR/USD Signals

Risk 0.75%.

Trades may only be taken before 5pm 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 1.1783, 1.1859, 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 1.1745, 1.1700, 1.1695, or 1.1680.

  • 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 due to the U.S. dollar regaining a little ground and the relative weakness of the euro, plus the bearish head and shoulders pattern we were seeing technically, I was interested in a short trade entry following two consecutive hourly closes below the support level at 1.1767, targeting the next support level and round number at 1.1700.

I was correct that the price would start to move down and also about looking for the breakdown of 1.1767. However, my precise recommendations have not produced an overall profit yet, although the short entry at 1.1752 may still come good.

The technical picture is more bearish than it was yesterday due to this breakdown below 1.1767, but the problem for bears is that we see a new support level emerging at 1.1745 which so far has blocked a further downwards movement to the round number at 1.1700.

If the price can get established below 1.1745 that will be a bearish sign and if it can get established above 1.1783 that will be a bullish sign.

EUR/USD

There is nothing of high importance due today concerning 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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