My previous EUR/USD signal on 6th June was not triggered, as there was no bullish price action when the price first reached the area of identified support at $1.0704.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be entered between 8am and 5pm London time today only.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0796, $1.0835, $1.0848, or $1.0871.
- 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 $1.0737, $1,0724, or $1.0705.
- 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, I said that the technical picture looked choppy between $1.0625 and $1.0800. I thought that the best strategy would probably be to trade reversals from any price extremes such as $1.0626 and $1.0796.
This was good enough to keep them out of trouble. I was correct about the price lacking many directions over that day.
The technical picture is now more bullish, having produced what looks like a bullish cup and handle pattern at the bottom, shown in the price chart below, and this has triggered the current bullish move up to a new 3-week high price.
The Euro is the strongest major currency while the US Dollar is the weakest, so this currency pair is in focus. Another reason for this is that both central banks will be meeting over the coming days, with the Fed expected to pause hikes, while the ECB is expected to hike by 0.25%.
Technically, the price has risen firmly and is now testing the resistance level at $1.0796 which is very confluent with the round number at $1.0800.
If the price will get established above this level after the London open, say with two consecutive higher hourly closes, that will suggest a further upwards move is likely to happen, with the price likely to reach $1.0835 quite quickly.
However, so much is likely to be determined by the release of US CPI (inflation) data due later, which is expected to fall strongly to 4.1%. If the data is considerably worse, we could see the price fall and disregard any technical considerations.
I think the best strategy today for most traders will be to wait for the US CPI data release and then look to trade a reversal from a spike to a far support or resistance level. If the release is as expected and the price is gaining above $1.0800, a long trade monitored on a short time frame would probably be the best option.
Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time. There is nothing of high importance due today concerning the EUR.
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