EUR/USD Forex Signal: Weakly Bearish

Adam Lemon

Head & shoulders pattern yet to break down.

Yesterday’s signals were not triggered as the bullish price action took place a little way above the support level at 1.1789.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be entered prior to 5pm London time today.

Short Trade Ideas

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1859 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 1.1767 or 1.1700.

  • 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 technical picture had become more bearish as support levels have broken down, but even more importantly we saw the final shoulder of what looked like a bearish head and shoulders pattern forming, with a neckline at about 1.1767.

I was looking for a short trade below 1.1767, but the price never even reached this level, and mostly went sideways over the past day.

I was correct to see 1.1767 as pivotal and it still looks pivotal.

The U.S. dollar is generally the second-weakest major currency after the Japanese yen but is regaining a little ground now as markets stabilize somewhat after last week’s volatility driven by the disputed result of the U.S. election.

What is more noteworthy is the relative weakness of the euro.

For these reasons, I remain 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.EUR/USDhttps://www.tradingview.com/chart?symbol=FX%3AEURUSD

 

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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