EUR/USD Forex Signal: Pivotal Point at $1.1887?

My previous EUR/USD signal on 5^th February was not triggered.

Today’s EUR/USD Signals

• Risk 0.75%.
• Trades may only be entered prior to 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 $1.1887, $1.1949, or $1.1975.
• 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 $1.1833, $1.1806, or $1.1766.
• 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.

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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 exactly one week ago, I thought that the EUR/USD currency pair was likely to make choppy price action, with a bullish bounce off $1.1672 a good candidate for fading a post news spike. I was correct about relatively choppy price action, but the price never got close to $1.1672.

The technical picture now is more straightforward, and we are quite likely to see some action in this pair today as the US Dollar has been responding to yesterday’s releases of stronger than expected US jobs and earnings data. This has firmed up the US Dollar, which has seen the price break below the former support level at $1.1887. However, the price found a floor at $1.1833 and looks to be completing a textbook bullish “square root” candlestick pattern with double bottom at about $1.1850.

This suggests we are likely to see a move higher, but the price must first get established above the pivotal point at $1.1887 which was formerly support.

If we get two successive higher hourly closes above $1.1887 without significant upper wicks, I will look to be long targeting $1.1949.