My previous EUR/USD signal on 17th November was not triggered, as none of the key support and resistance levels I had identified were reached that day.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be entered between 8am and 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 $1.0288.
- 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 $1.0240, or $1.0220, or $1.0141.
- 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 last Thursday, I thought that we were clearly seeing bullish momentum but that it was likely to run out of steam soon as the long-term moving averages are still well below the short-term ones, a sign of a premature trend.
This was a good call as the price has indeed reversed from its earlier highs near the key resistance level at $1.0486 and made an obvious bearish turn on the daily chart. We are now seeing the price trade lower and break below one support level which now seems likely to act as resistance, at $1.0288.
The US Dollar regained strength towards the end of last week and started this week strongly, and this is also helping to push the price down.
It is fair to say we have a weakly bearish environment now, but I do not really have faith that the price is going to go much lower over the near term. There are two support levels nearby that are quite likely to hold up the price, at least over today, as there is really an extremely light agenda today with no news likely to move markets significantly.
I am prepared today to take a short trade from a bearish reversal that might happen with a rejection of the nearest resistance level at $1.0288, being careful to then watch what happens at the support levels if they are reached. If the price can get established later below $1.0220 that will be a bearish sign and suggest that a deeper fall to $1.0141 is likely to happen next.
There is nothing of high importance due today concerning either the EUR or the USD.
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