My previous EUR/USD signal on 16th September gave a profitable long trade from the doji candlestick reversal at the support level of $1.1586.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken before 5pm London time today.
Short Trade Ideas
- Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.1627, $1.1647, or $1.1561.
- 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.
- 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 timeframe immediately upon the next touch of $1.1627, $1.1616, or $1.1600.
- 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.
- 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.
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EUR/USD Analysis
In my previous EUR/USD analysis about one month ago, I thought that the EUR/USD currency pair was looking likely to rise and I was ready enter a long trade if we had gotten a New York close above $1.1806.
This was a good call as the price did rise strongly that day, but the breakout trade above $1.1806 would only have produced a win of about 50 pips maximum before turning into a loss, which would probably not have been a profitable swing trade if taken.
The technical picture now has become much more interesting after the recent decline from multi-month highs above $1.1850:
- We see a bullish head and shoulders pattern providing a bottom, with the price making a bullish breakout just before the London session gets underway above the former resistance level at $1.1627.
- This bullishness comes after the price broke out of a bearish descending price channel, and I’ve drawn the trend lines to show that within the price chart below.
- The US Dollar Index remains below a very key resistance level at 98.60.
Technically, the picture looks bullish.
Fundamental and sentiment analysis support the bullish mood here: its not so much that there is anything going on with the Euro, but the US Dollar is weaker after Fed Chair Jerome Powell made a dovish tilt in his public comments yesterday. There is now a nearly unanimous expectation of two further rate cuts from the Fed, 0.25% at each of the next two meetings. This is helping weaken the US Dollar.
I suggest day traders look for long trades as long as the price holds up above $1.1627 and shows bullish price action over the course of today.
There is nothing of high importance due today regarding either the Euro or the USD.
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