EUR/USD Forex Signal: Bullish Breakout Above 1.2260

Adam Lemon

A note of caution for bulls – the price has reached a zone that was formerly very consolidative, so it may struggle to get higher despite the bullish momentum.

Yesterday’s signals were not triggered as the bearish price action took place above the key resistance level I had rejected at 1.2260.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken between 8am and 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 1.2300, 1.2313, or 1.2354.

  • Place 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 Idea

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2234.

  • Place 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 price was rising over the short-term but remained within a consolidative zone and arguably a bullish triangle, therefore I was prepared to trade short a bearish reversal from 1.2268 but would otherwise take a bullish bias if the price made a New York close above that level.

This was enough to keep out of trouble. The price did not close above that level but has broken up above it during the Asian session, and we now see what appears to be higher support at 1.2276 which is holding so far. This is a bullish sign and I think everything now depends upon whether the price can close above 1.2268 at the end of today’s New York session – if so, I will get firmly bullish on this currency pair as it will represent a new 2.5-year high closing price which is undoubtedly bullish.

Another bullish factor is that the EUR is one of the stronger major currencies against the USD, which is weak everywhere.

A note of caution for bulls – the price has reached a zone that was formerly very consolidative, so it may struggle to get higher despite the bullish momentum.

EUR/USD chart

There is nothing of high importance scheduled today regarding either 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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