Yesterday’s signals were not triggered, as the bullish price action took place below the support level identified at 1.1887.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered between 8am and 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 1.1964 or 1.2005.
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 1.1929, 1.1887, or 1.1848.
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 the strong upwards movement and test of resistance at 1.1929 produced a much more bullish picture and possibly the start of a long-term bullish breakout trend. I was interested in buying at support levels when confirmed by price action but still cautious about the fact that the price faces an area of strong long-term resistance between 1.1929 and 1.2000 where we may well see a long-term bearish reversal.
This was a good call as far as it went – I was hedging my bets somewhat. However, I was right about buying on a dip to support, although unfortunately the support level at 1.1887 was not respected precisely enough to generate a long trade entry signal.
The bullish movement has continued, with the price in recent hours breaking above the former key resistance level at 1.1929, which is a bullish sign if the price will hold above that. The price again yesterday closed at a new 50-day which puts the odds of a further price rise today at about 53%. Now that the resistance at 1.1929 has been cleared, the price can have a free run to reach the next resistance level at 1.1964.
Although the technical signs are all bullish, I still fear that this area of long-term resistance we have reached – especially the confluence of horizontal resistance at 1.2005, and the huge round number at 1.2000 – will be too much weight for the price to make a fast bullish break above that area over the short term. This area could still be a great opportunity for a long-term short trade, but if the price gets established above 1.2000, that will be a major bullish sign and will likely presage a stronger bullish move.
I will be happy to buy from bounces at any support levels which are reached on dips today.
There is nothing of high importance scheduled today regarding either the EUR or the USD. It is a public holiday in the U.S. today.