Last Tuesday’s EUR/USD signal may have produced a losing long trade from the bullish inside candlestick break which rejected the support level identified at 1.1555.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered between 8am and 5pm London time today.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1609 or 1.1668.
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.
Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
Long Trade Ideas
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1587, 1.1567, or 1.1536.
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.
Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.
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 Tuesday that the key indicator of today’s EUR/USD direction was whether the price remained above 1.1555 or broke below it. This was a pretty good call as once the level broke down, the price continued to fall over the rest of the day, reaching a long-term low price at 1.1524.
The price has been rising ever since the low was made that day, and we are seeing several new higher support levels get formed as the price now looks bullish and approaches the next key resistance level at 1.1609.
There is a long-term bearish trend here, but the pull back is quite deep, and I think it will be significant if the price gets established above the resistance level at 1.1609 later today. That would be a bullish sign.
The euro has been one of the weakest major currencies in recent weeks, and the strong USD has pushed the price down. However, yesterday’s higher than expected US inflation data has pushed the dollar down, and we should now watch carefully to see whether the greenback bounces back from its drop made over recent hours.
I will take a bullish bias on this currency pair if the price can get established above 1.1609.
Concerning the USD, there will be a release of PPI data at 1:30pm London time today. There is nothing of high importance today scheduled regarding the EUR.