Last Thursday’s EUR/USD signals produced a losing long trade from the bullish hourly doji candlestick which rejected the support level identified at 1.1914.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today only.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1837, 1.1851, or 1.1867.
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 1.1789 or 1.1745.
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 last Thursday that the price seemed to have made a convincing double top just below the very important round number at 1.2000, but that the only worthwhile opportunity which might set up today would be a long trade from a bullish bounce from the area between 1.1914 to 1.1900 if reached, as we had there a key support level, a round number, and an ascending trend line.
These were the correct features to highlight as the bearish move from the double top just below 1.2000 has been sustained and serious, and there was a bounce last Thursday at 1.1914 – however this bullish bounce was only able to produce less than 20 pips of profit before the bullish move quickly failed and the downwards push resumed.
The technical picture has become seriously bearish, evidenced by the facts that the price is contained within a relatively wide but symmetrical bearish descending channel shown within the chart below, and that the price is continuing to make new multi-month lows not seen for four months. In this currency pair, such long-term breakouts with momentum have tended to give a trading edge in the direction of the breakout.
I take a generally bearish bias for these reasons and will be very happy to take a new short trade from any retracement to 1.1837 followed by a bearish reversal which might set up today.
Regarding the EUR, the E.U. is holding an EU Economic Sumit today. Concerning the USD, there will be a release of Final GDP data at 12:30pm London time.