My previous EUR/USD signal on 26th November was not triggered, as there was no bearish price action at resistance.
Today’s EUR/USD Signals
- Risk 0.75%.
- Trades must be entered between 8am and 5pm London time today only.
Short Trade Idea
- Short trade entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0610.
- 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 20 pips in profit and leave the remainder of the position to run.
Long Trade Ideas
- Long trade entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0499 or $1.0425.
- 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.
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EUR/USD Analysis
In my previous EUR/USD analysis about two weeks ago, I wrote that despite the valid long-term bearish trend, I doubted that we would see significantly lower prices any time soon.
This was a good call.
The technical picture has become more bearish over recent days, after a period where the price just would not get established below $1.0500 and even threatened to break significantly above $1.0600.
We saw a bearish head and shoulders pattern complete from the rejection of $1.0610 a few days ago, and then a second bearish head and shoulders pattern form. The price is now falling firmly and looks set to threaten the big round number and confluent horizontal support at $1.0500, so this level looks likely to be pivotal today.
Unfortunately, we cannot be purely technical as there will be a release later today around the US open of US CPI (inflation) data, which could move all USD currency pairs, including this one.
Due to this big data release, I think long scalps from bounces off $1.0500 could be interesting before the CPI numbers come out. If we get a New York close solidly below $1.0500, that could be a good short trade entry signal.
There is nothing of high importance due today concerning the Euro. Regarding the USD, there will be a release of CPI (inflation) data at 1:30pm London time.
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