Today’s EUR/USD Signals
Trades may only be entered before 5pm London time today.
Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0591 or $1.0604.Place the stop loss 1 pip above the local swing high.Move 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
Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0457 or $1.0391.Place the stop loss 1 pip below the local swing low.Move 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.
I wrote on 12th May that as we were seeing a persistent and narrow consolidation chart pattern at the end of strong long-term downwards price movement, it made sense to look for a short trade here following two consecutive hourly closes below $1.0484.
This was a great call, as we got those two hourly closes below that level very early in the day’s London session and entering at that point would have produced a profitable short trade with a maximum 85 pips of profit.
The technical picture now is much more consolidative, despite the long-term bearish trend and the price reaching a multi-year low only a week ago. In fact, after the big fall on 12th May, the price has been steadily rising, printing higher lows and new higher support levels.
We have a bullish retracement that seems quite strong, with the US Dollar showing signs of having peaked. This suggests bulls have the edge over the short term but may not be able to drive the price much higher.
I see the best potential opportunity in this currency pair today as either a short-term long trade from a bullish bounce at $1.0457, or a longer-term short trade if the key resistance level at $1.0591 is reached, which looks likely to be very strong.
There is nothing of high importance due today concerning either the EUR or the USD.