Last Thursday’s EUR/USD signal could have produced a losing long trade entry from the bullish rejection of the support level I identified at 1.1640.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken before 5pm London time today.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1617 or 1.1668.
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.
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 1.1567 or 1.1536.
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.
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 best approach would be to wait for a downwards movement which tested the lower trend line and ideally confluent support at 1.1609 or 1.1623. A firm bullish bounce in this location should be a high probability long trade entry signal. On the other hand, if the price broke down below 1.1609, that would be a bearish sign and could lead to a sharp fall.
This was not a bad call as the price did make a bullish reversal from the 1.1623 area but only after London has closed so the signal was not timely enough.
After making the bullish reversal at 1.1623, the price headed down again from the area of the bearish triple top at the very solid resistance level of 1.1668. The price then moved down more strongly from that area, finally breaking below the bearish price channel, the remains of which can still be seen in the price chart below.
The downwards movement is in line with the long-term bearish trend in this currency pair, and the push has produced a new key resistance level at 1.1617 that earlier acted as support, so it looks to be a reliable “flipped” level.
The key feature is that the euro is the weakest major currency right now, while the US dollar is quiet. However, the weakness in the Euro is enough to suggest that a retracement to 1.1617 and another bearish rejection of that level from below with a firm bearish reversal should give a short trade entry with good potential.
There is nothing of high importance today scheduled regarding either the EUR or the USD.