EUR/USD Forex Signal: Consolidating Above 1.2157

Adam Lemon

The price is now consolidating weakly above 1.2157 but so far is showing no sign of really trying to rise.

Last Wednesday’s signals were not triggered as none of the key levels were reached that day.

Today’s EUR/USD Signals

Risk 0.75%.

Trades may only be taken before 5 PM London time today.

Short Trade Ideas

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2200, 1.2227, or 1.2277.

  • 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 Ideas

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2157, 1.2139, or 1.2107.

  • 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 last Wednesday that I was not strongly confident about the likely direction of the price of this currency pair over the day, but it seemed as if the price would continue to rise and reach 1.2178 where it might find firm resistance. I was prepared to take a short-term trade from a bearish reversal at 1.2178.

This was not a good call, as the price got nowhere near 1.2178 and spent the day falling surprisingly heavily before recovering.

The technical picture now has become slightly more bullish, with new support levels getting established higher up at 1.2139 and 1.2157. The price is now consolidating weakly above 1.2157 but so far is showing no sign of really trying to rise.

Although the USD is generally weak, the euro has little strength in it, which is keeping the price action here flat.

I am not looking to take any trades today long of the USD, but I am not enthusiastic about trading this pair long either.

I think the only approach worth taking if trading this currency pair today will be to scalp reversals at either of the nearby support levels, or the resistance level confluent with the round number at 1.2200.

EUR/USD chart

There is nothing of high importance scheduled today regarding either the EUR the or 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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