EUR/USD Forex Signal: Consolidating Above $1.1317 Support

Adam Lemon

The euro is a relatively weak currency.

Yesterday’s EUR/USD signal was not triggered as there was no bearish price action when the price first reached the support levels identified at $1.1387 or $1.1352.

Today’s EUR/USD Signals

Risk 0.75%.

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

Short Trade Ideas

  • Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.1352 or $1.1387.
  • 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

  • Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.1317, $1.1261, $1.1250, $1.1229.
  • 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 yesterday that as we had no major data releases today to disturb the dominant consolidation pattern, we would be likely to see the price consolidate over the day between $1.1387 and $1.1435 or maybe $1.1451. However, I thought that traders should be cautious around the New York open as there may be volatility due to the US return from holiday.

This was not a good call as the price broke down below the support at $1.1387 even before the New York open, and kept falling all day, reaching the next support level at $1.1317 where it may have made a bullish reversal.

Yesterday’s Forex market was driven by a strengthening US dollar on rising US Treasury yields. This seems to be reversing over recent hours, so the EUR/USD maybe has some scope to rise over the short-term, which is supported by the bullish short-term price action rebounding from the support at $1.1317. However, there looks to be key resistance close overhead at $1.1352 which could halt much further advance.

Both the closest support and resistance levels to the current price look likely to hold, so I again have no bias on today’s direction. I think the best approach will be to scalp from any bounces at a key level, if the level looks like it is being rejected by the price.

EUR/USD

There is nothing of high importance due today concerning 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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