Yesterday’s signals were not triggered, as there was no bearish price action when the resistance level identified at 1.1865 was first reached.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be entered before 5pm 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 1.1929 or 1.1964.
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 1.1846, 1.1815, 1.1789, or 1.1745.
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 picture was weakly bullish, and that a bullish breakout beyond 1.1865 could see an accelerating upwards movement all the way to 1.1829. Beyond that level, the price really starts to approach long-term highs and the big round number at 1.2000 and things could get very interesting up there.
This was a good call as the price did get above 1.1865 and invalidate that level, and we are seeing the price advance late in the Asian session towards yesterday’s high above that number. The price action has been consistently bullish over several hours.
The only worry for bulls should be that this area which the price is now approaching, between approximately 1.1900 and 1.2000, has been strong long-term resistance for a long time, incorporating the natural resistance pressure and major interbank FX barrier options of 1.2000. Whether the euro can really gather the strength to get established above 1.2000 and continue to rise meaningfully is a very open question.
I am generally bullish on this currency pair today, but I doubt that the price will be able to get much above 1.1929. A bearish reversal there could be a great long-term trading opportunity, at least in terms of reward to risk potential – it would be most likely to be a losing trade.
Concerning the USD, there will be a release of Retail Sales data at 1:30pm London time. There is nothing of high importance due today concerning either the EUR or the USD.