EUR/USD Forex Signal: Very Bearish Below 1.1588

Adam Lemon

The price is likely to fall today after yesterday’s strong fall with high volatility.

Last Thursday’s EUR/USD signal was not triggered as there was no bearish price action when the price first reached the resistance level identified at 1.1717 that day.

Today’s EUR/USD Signals

Risk 0.75%.

Trades may only be taken before 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 1.1668 or 1.1688.

  • Put 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 run.

Long Trade Idea

  • Go long immediately upon the next touch of 1.1517.

  • Use a stop loss of 25 pips.

  • Move the stop loss to break even once the trade is 25 pips in profit.

  • Remove 50% of the position as profit when the price reaches 25 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 Thursday that I was looking for a short trade in line with the long-term bearish trend in this currency pair, and I thought that the resistance level at 1.1717 was likely to be pivotal. I was wrong about the level, which did not hold, and wrong about that day’s direction as well. However, I was right about the trend, which over the past week has continued to push the price down, finally breaking to a new multi-month low yesterday below 1.1600.

Yesterday’s price drop was very bearish – the daily candlestick closed very near its low, and the day’s range was very nearly twice the average true range of the past 15 days. These technical elements suggest that we are more likely than not to see a further meaningful downwards price movement today, meaning there could be a good short trade opportunity here, as the price today has still not broken below yesterday’s low.

I see a strong trade opportunity here, to go short right away when there is a bearish hourly candlestick which closes below yesterday’s low price at 1.1588.

There is likely to be strong support between 1.1517 and 1.1500 if the price reaches that area soon, so placing a limit buy order within that area could produce a good long scalping trade. This area also provides an obvious profit target for any short trade taken below 1.1588.

EUR/USD

Concerning the USD, there will be a release of Final GDP and Unemployment Claims data at 1:30pm London time followed by the Chair of the Federal Reserve and the Treasury Secretary testifying before Congress at 3pm.

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

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.