EUR/USD Forex Signal: Slow Recovery from 1-Year Low

Adam Lemon

Today’s pivotal point is likely to be 1.1555.

Last Thursday’s EUR/USD signal was not triggered as none of the key support and resistance levels specified were reached that day.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be entered prior to 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 1.1588 or 1.1610.

  • 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 1.1555 or 1.1517.

  • 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 we had a firm long-term bearish trend in this currency pair, driven mostly by the US dollar which is usually a good sign as to trend strength. I thought there were good reasons to be looking for short trades here. I was ready to take a short trade from a bearish reversal off 1.1562. The bearish price action took place above 1.1562 so this was not a useful call.

Despite the price not rising by much from the 1-year low that was reached last week, we have seen a succession of higher lows and higher highs for some days, and significantly there appears to be a new higher support level at 1.1555 which has held up the price for some hours. The EUR/USD currency pair is prone to relatively deep retracements within its trends, and we seem to be getting such a bullish retracement right now.

Turning to market sentiment, the euro is weak but moving slowly – the major action in the Forex market over recent days has occurred through the Japanese yen, which has weakened sharply, sending the USD/JPY currency pair to a new multi-year high price.

I see the key indicator of today’s EUR/USD direction as whether the price remains above 1.1555 or breaks below it. If we see a strong break below 1.1555 during the first half of today’s London session that could provide a good opportunity to enter a new short trade.

EUR/USD

There is nothing of high importance scheduled today concerning either the USD or the EUR.

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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