Yesterday’s signals were not triggered, as there was insufficiently bearish price action when the resistance level at 1.2260 was first reached.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be taken 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 1.2228, 1.2260, 1.2300, or 1.2310.
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 1.2210.
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 the short-term price action looked bearish, and the price seemed to have room to fall further to the 1.2100 area. This was an OK call as the direction was downwards over the first few hours of the London session yesterday, with the price getting down to 1.2130 before recovering.
We saw high volatility yesterday, with risk assets getting hit hard for a few hours as the U.S. dollar came back very strongly on fears of new coronavirus strains and a “no deal” Brexit taking place in a few days, with the latter factor being especially important in hitting the euro as well as the British pound.
The strong volatility yesterday coupled with the new lower resistance at 1.2228 plus the way the price has seemed to top again over recent hours, suggests that we are unlikely to see new highs today beyond 1.2260, which looks to be a great resistance level at which to seek a short trade.
There are no key support levels until 1.2106 so the price has plenty of room in which to fall.
These reasons suggest that today is likely to be a down day, so I will look for short trades although a bullish bounce at 1.2106 could provide an attractive long trade entry.
There is nothing of high importance scheduled today regarding the EUR. Concerning the USD, there will be a release of Final Quarterly GDP data at 1:30pm London time.