My EUR/USD signal on 7th April produced a nicely profitable short trade from the bearish hourly pin bar which rejected the nearest resistance level which I had identified at $1.0937. This trade gave a maximum of 70 pips profit for a risk of 32 pips.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered before 5pm London time today.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0937, $1.0956, $1.0985, or $1.1025.
- 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 50 pips in profit and leave the remainder of the position to run.
Long Trade Idea
- Go long immediately upon the next touch of $1.0710.
- 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 were seeing a bullish rounding near $1.0900 which was pushing the price back up towards the nearby resistance levels in a bullish retracement. The question was how far this retracement would run.
I thought the best approach here would be to look for a new short trade entry from a convincing reversal on the hourly time frame off any of the nearby resistance levels identified.
This was a good call as the bullish retracement failed at the first resistance level of $1.0937 and produced a nicely profitable short trade.
There has been little change to the technical picture, with all the key support and resistance levels remaining the same. The price has remained below the nearest resistance level at $1.0937 since last Thursday. The only change has been the reluctance of the price to make really significant new lows at or below the $1.0850 area. The US Dollar remains strong, but the Euro is showing a reluctance to make a real breakdown, unlike the Japanese Yen where the central bank is actively pushing lower prices.
Despite the price’s inability to break down, the long-term outlook is bearish, and the trend is clearly downwards, so short trades from clear bearish reversals at $1.0937 or any of the other resistance levels identified above continue to look attractive.
Some analysts believe the Euro is getting a little strength from President Macron’s clear first round victory yesterday in the French Presidential election, but I see any such strength as exceedingly small and likely to be short-lived.
There is nothing of high importance due today regarding either the EUR or the USD.