EUR/USD Forex Signal: Weakly Bullish

Adam Lemon

Area at 1.1865 remains pivotal.

Yesterday’s signals produced a profitable short trade from the bearish pin bar on the hourly chart which rejected the resistance level identified at 1.1859.

Today’s EUR/USD Signals

Risk 0.75%.

Trades may only be taken prior to 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 1.1865 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 1.1815, 1.1789, or 1.1745.

  • 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 short-term price action was suggesting that the rally may be running out of steam, with the nearby area of resistance at 1.1859 looking quite strong naturally. I saw this area (not a precise level) as highly likely to be the day’s pivotal point, with a short trade looking like the most obvious potential set-up. However, support at 1.1843 nearby also looked likely to be strong, so there may not be much downside there.

This was a near-perfect, profitable call, as the price made a bearish reversal at 1.1859 before producing a little more than about 30 pips of profit. Although 1.1843 did not hold as support, I was right that there was no going to be a lot of downside during the day even in the best-case likely bearish scenario.

The picture remains weakly bullish after a typically inconclusive and indecisive Monday trading session. I have adjusted the nearby support up a few pips to 1.1865 and again today I have to emphasise that it is more of an area than a precise level. I think this level will remain pivotal and if the price fails to break above it and again produces a bearish reversal, it could be a good trade. On the other hand, 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.EUR/USDConcerning the USD, there will be a release of Retail Sales data at 1:30pm London time. There is nothing of high importance scheduled today regarding the EUR.

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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