EUR/USD Forex Signal: New 2.5-Year High Price

Adam Lemon

The price is hitting new 2.5-year highs and the dollar is in decline almost everywhere.

Yesterday’s signals were not triggered as none of the key support or resistance levels identified yesterday were reached.

Today’s EUR/USD Signals

Risk 0.75%.

Trades may only be entered before 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 1.2313 or 1.2354.

  • Put 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 Idea

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2256 or 1.2234.

  • Put 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 we were seeing bullish signs and I thought that everything now depended upon whether the price could close above 1.2268 at the end of the day’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.

We did get a daily close above 1.2268 and so I have taken a bullish bias.

The price is hitting new 2.5-year highs and the dollar is in decline almost everywhere. Another new bullish sign is that we can now draw a symmetrical ascending price channel which contains recent price action. We also saw the invalidation of a resistance level near to where the price currently sits, which is another bullish sign.

The only reasons to be cautious are that the euro is not rising as strongly as some other currencies, notably the Australian dollar; and that the price is now reaching an area which was previously very consolidative, so it may struggle to rise higher despite the clear bullish momentum. It is also worth noting that the upper trend line of the price channel and the horizontal resistance level at 1.2313 are confluent, so this may be a tough area for the price to break through.

I will be very happy to take a long trade here if we get any bullish bounces at either of the two nearby support levels identified above.

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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