A pivotal point today looks likely to be $1.1400.
My EUR/USD signal last Wednesday was not triggered as there was insufficiently bearish price action when the price first reached the resistance level at $1.1335.
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be entered before 5pm London time today.
- Short entry at $1.1661.
- Use average recent volatility shown by the average true range (ATR) indicator to set a stop loss.
- Move the stop loss to break even once the trade is 50 pips in profit.
- Remove 50% of the position as profit when the price reaches 50 pips in profit and leave the remainder of the position to ride.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.1403, $1.1387, $1.1368, or $1.1335.
- 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.
- 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.
EUR/USD Analysis
I wrote in my last forecast last Wednesday that the best option would probably be to try to ride the new bullish wave until it ran out of momentum. I thought this may already have happened or would be quite likely to happen at the slightly higher price of $1.1295. I thought this area would be pivotal, so I had an alternative of the price getting above $1.1300 and traders looking for a long scalp if there was room left to rise to $1.1335 at that point.
This was an indifferent call. The price did get above $1.1300 and gave a possible 20 pips or so of profit for a scalp during the first half of the London session that day.
The technical picture is dominated by last week’s firm rise in the price, which came after the European Central Bank gave a more pessimistic policy outlook and refused to rule out a first rate hike to be made during 2022. This saw the euro rise and the price here hit a high of $1.1483 the next day. Since that peak on Friday, the price has continued to gently retrace, and now seems to have arrived at the pivotal point of the support level confluent with the round number at $1.1400.
Much will depend now upon whether this support holds, although there are a few support levels close below that which are shown in the price chart below. However, I see $1.1400 as the most likely level to be strong, so an early clue will come in whether the price gets established now below this level, which would be a bearish sign. One piece of evidence increasing the chances of this happening is the fact that the ehas been the weakest major currency since the end of yesterday New York session.
If we do not get any hourly closes below $1.1400 as we go into the London session’s first few hours, we will become more likely to see a bullish reversal here, which could be very attractive as there are no key resistance levels above for more than 200 pips, so the price technically has plenty of room to rise.
There is nothing of high importance due today concerning either the EUR or the USD.
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