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EUR/USD Forex Signal: Bullish Consolidation Held by $1.1430

By Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

My previous EUR/USD signal on 9th April was not triggered, as there was no bullish price action when the support level at $1.1021 was first reached.

Today’s EUR/USD Signals

  • Risk 0.75%. Trades must be entered before 5pm London time

Short Trade Idea

  • Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.1430.
  • 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

  • Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.1345, $1.1272, or $1.1241.
  • 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 EUR/USD analysis just over one week ago, I thought that the EUR/USD currency pair was getting ready to rise, with the key pivotal point bulls needed to overcome to get the bullish momentum going again being the resistance level at $1.1120. I was also looking to buy a bounce at $1.1021.

This was a good call as once the price finally cleared $1.1120 it did take off to the upside, and there was a bullish bounce that day not exactly at $1.1021 but within the nearby area.

The technical picture remains bullish, with the price making a flat consolidation just below what looks like very key resistance at $1.1430. This area represents a multi-month high, and this currency pair is the major gainer of the post-Trump tariff announcement period in the Forex market of fiat currencies.

The US Dollar Index is invalidating former support at 99.27 and this also points towards a good chance of further losses for the greenback, which would point towards more upside here.

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The ECB is widely expected to cut rates today by 0.25%, but this is not necessarily going to prevent a bullish breakout beyond $1.1430.

I am holding onto my long-term long position in this currency pair, and technically speaking a breakout to new highs will likely happen, although maybe not today. So, here I am only looking for long trades above $1.1430 once the price gets established above that level.

If the ECB says something unexpectedly dovish during the press conference at the end of today’s policy meeting, we might see a bigger bearish reversal off $1.1430.

image

https://www.tradingview.com/chart?symbol=FX%3AEURUSD

Concerning the Euro, the European Central Bank will be holding a policy meeting today at 1:15pm London time, followed half an hour later by the usual presser. Regarding the USD, there will be a release of Unemployment Claims at 1:30pm.

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Adam Lemon

Adam Lemon began his role at DailyForex in 2013 when he was brought in as an in-house Chief Analyst. Adam trades Forex, stocks and other instruments in his own account. Adam believes that it is very possible for retail traders/investors to secure a positive return over time provided they limit their risks, follow trends, and persevere through short-term losing streaks – provided only reputable brokerages are used. He has previously worked within financial markets over a 12-year period, including 6 years with Merrill Lynch.

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