Last Tuesday’s EUR/USD signals were not triggered, as there was no bullish price action when the support level identified at 1.1850 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
- Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1850 or 1.1896.
- 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 1.1823, 1.1807, or 1.1772.
- 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 Tuesday that the price had strongly rejected the latest long-term low and had arrived back to a strong and flat consolidation zone. As such, I thought that there might be a worthwhile opportunity entering either a short trade from a bearish reversal at 1.1896, or a long trade from a bullish reversal at 1.1807.
This was not a great call, as instead of staying within a flat consolidation, the price plunged to make a new long-term low on considerably above-average volatility, suggesting that the price would move lower still over the coming days. However, we have again seen a strong rebound from the low.
These strong rejections from the lows should be troubling to bears, but there is no doubt that the price has begun to form a valid and wide bearish price channel. Therefore, we can say that there is a bearish trend, but it is a slow one with deep retracements.
I see the best opportunity likely to set up today as a short trade from a bearish reversal which may form at the upper trend line of the bearish price channel shown in the price chart below or at the horizontal resistance level roughly confluent with it at 1.1850.
Concerning the USD, there will be a release of unemployment claims data at 1:30pm London time, followed by the chairman of the Federal Reserve’s testimony before Congress one hour later. There is nothing of high importance concerning the EUR scheduled today.