EUR/USD Forex Signal: Falling to 1.2000

Adam Lemon

There is a pivotal point at 1.2000 / 1.1994.

Last Thursday’s EUR/USD signals were not triggered, as there was no bullish price action when the price first reached the support level at 1.2116.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be entered before 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 1.2075, 1.2102, or 1.2157.
  • 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 1.1994, 1.1943, 1.1937, or 1.1922.
  • 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 although we were seeing a more bullish technical picture as the advance of the price was well above 1.2100, I thought that the price was quite likely to struggle to get above 1.2156 as a long-term resistance area begins there.

This was a good call as the price turned bearish that day and continued to fall.

The USD has been strong over the past few days and remains bid, so we see the price moving down over the short term.

Over the medium term, we are seeing a broad consolidation between 1.2156 and 1.2000. The nearest support below the current price level is 1.1994 which is very confluent with the big round number at 1.2000, it is also the lower boundary of this consolidation zone. For these reasons, I think if the price continues to fall to reach 1.1994 today and rejects it quickly with a firm bullish bounce which pushes the price clearly back over 1.2000, that could be an interesting long trade, or at least a profitable scalp, as the resulting bullish push might not last for very long.

EUR/USD

There is nothing of high importance due today regarding 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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