Yesterday’s signals were not triggered as there was no bearish price action when the key resistance level at 1.2187 was first reached.
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 1.2260, 1.2300, 1.2310, 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 Ideas
Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2210 or 1.2107.
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 conditions are tending to drive the price higher, but the price has shown a reluctance to even reach 1.2200, which is an area where the price consolidated when it was previously there, suggesting a congestion zone remains just above where we are now. This means it looked as if the EUR/USD will struggle to rise higher, although it “wants” to.
I was correct to the long side, but I was overly pessimistic that the short USD trend would continue, as we saw a significant bullish breakout yesterday to new multi-year highs well above 1.2200.
The price is holding up and has retraced little even as we approach the start of the London session, which is a bullish sign. The dollar is in retreat against every major currency, with the euro being one of the relatively strong gainers. The EUR/USD currency pair tends to respect its long-term trends, and here we clearly have a bullish trend and a price trading in “blue sky”, so I continue to see long trade opportunities here.
I will take a long trade if we get a bullish bounce following a retracement to the new higher support level at 1.2210. I do not want to take any short trades in this currency pair today.
Regarding the EUR, there is nothing of high importance scheduled today. Concerning the USD, there will be a release of unemployment claims data at 1:30pm London time.