EUR/USD Forex Signal: Bullish Move Running into Resistance

$1.07 area likely to be pivotal today.

My previous EUR/USD signal on 21st December was not triggered, as none of the key levels were reached that day.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be entered prior to 5pm London time today only. 

Short Trade Idea

  • Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0692 or $1.0760.
  • Put the stop loss 1 pip above the local swing high.
  • Adjust 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 Ideas

  • Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0632, $1.0602, or $1.0575.
  • Put the stop loss 1 pip below the local swing low.
  • Adjust 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

In my previous analysis of the EUR/USD currency pair on 21st December, I thought the price was likely to continue to consolidate between $1.0575 and $1.0760, but with bulls having a slight edge, so I thought a long trade from a bullish bounce at $1.0575 could be a good opportunity if it set up. However, neither of these levels were reached over that day.

The technical picture has changed since, as we saw a deep bearish retracement as the US Dollar made a comeback before the end of last week saw the Dollar sell off strongly on positive US economic data which suggests the Fed may be able to bring down inflation without more dramatic rate hikes. This risk-on tilt has persisted over the weekend and can be seen in the market now, so the price is rising but showing signs of topping out as it gets close to the resistance level just below the round number at $1.0700.

I think that the $1.0700 area is likely to be pivotal today. If the price can get established above that, it will be a bullish sign.

This pair is in a long-term trend and tends to show statistical reliability in such trends, so I want to be long of this currency pair. Swing and longer-term traders will probably do best to wait for another retracement to a support level and enter upon a bullish bounce there.

The support level I have identified at $1.0634 looks especially strong and attractive.

EUR/USD

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

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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.