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