EUR/USD: Persistent buying below 1.0800
Yesterday’s signals produced a profitable short trade from the strong bearish reversal at 1.0887. The current short-term price action suggests that this winner is best left to run for at least a little longer.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken before 5pm London time today only.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.0836 or 1.0887.
Place 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 Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.0710.
Place 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.
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 yesterday that was still prepared to take a short trade from a bearish reversal at 1.0887. This was a great call as the price made a strong bearish reversal there and provided a profitable short trade entry.
The technical picture is more bearish as the USD is the second strongest currency after the Japanese Yen due to increasing risk-off sentiment in the markets. However, although the Euro is weak over the long-term, it is not showing the same tendency to move down in the way that other risk currencies such as the British Pound are. So, although a new lower resistance level was printed on the way down, we still have a pattern of higher lows and highs below 1.0887.
For these reasons, I would prefer a conservative short trade, ideally from 1.0887 again, although I would also take a short trade from a bearish reversal at 1.0836 if any reversal there is strong.
There is nothing of high importance due today concerning either the EUR or the USD.