EUR/USD Forex Signal: Bullish Momentum

Adam Lemon

The US dollar is finally showing some weakness.

Last Thursday’s EUR/USD signal was not triggered as there was no bearish price action when the resistance level at 1.1609 was first reached that day.

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 1.1668, 1.1688, 1.1711, or 1.1753.

  • 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 1.1640, 1.1609, or 1.1567.

  • 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 I thought it would be a significant bullish if the price got established above the resistance level at 1.1609 later in the day. That would be a bullish sign.

This was a good call insofar as it was enough to keep out of trouble, as bulls briefly popped the price above 1.1609 but the price immediately turned around and fell quickly back below 1.1609, signalling that the time was not ripe yet for a sustained bullish price movement. We did not see a sustained break above 1.1609 until yesterday.

The price has been in a long-term bearish trend for quite some time, but we are now seeing more momentum against it with this strong bullish pullback which really puts the sustainability of the bearish trend in doubt.

The US dollar is the weakest major currency right now, which has been unusual lately, so we are seeing the euro move up against it quite firmly. The British pound is also doing so, a little more strongly, so trading the GBP/USD long might be a slightly better idea than trading this pair long.

I think we are a little likely to see higher prices over the course of today so I would not look to take any short trade unless the price rises very strongly to the 1.1753 level which could be very strong resistance.

I am prepared to take a long trade from a bullish bounce that may set up later at the support level of 1.1640.

EUR/USD

There is nothing of high importance today scheduled regarding either 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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