The pivotal point today is likely at the nearby resistance level.
My EUR/USD signal Tuesday last week produced a profitable long trade from the bullish bounce off the support level at $1.1403.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today only.
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.1368 or $1.1418.
- 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.
- Remove 50% of the position as profit when the price reaches 50 pips in profit and leave the remainder of the position to run.
Long Trade Idea
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.1279.
- 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 previous forecast on Tuesday last week that the price had descended to the pivotal point of the support level confluent with the round number at $1.1400. I thought the price would either break down or bounce giving an opportunity for a trade in either direction, with a long trade having the most potential. This was a great call as $1.1400 held that day, giving a profitable long trade entry.
Markets in general have been overtaken by sentiment regarding the Russia/Ukraine crisis. When a Russian invasion looks more likely, risk assets fall, and vice versa. This increasing crisis in recent days saw the US dollar gain and push the price down while in its absence, I think the price would have continued rising. This pair is not the one most affected by the Ukraine crisis, however – the Australian dollar continues to be the key risk barometer currency in Forex. The bottom line is that the continuing crisis can push the price up or down and override any technical factors, making trading potentially very profitable but also somewhat dangerous.
Technically, the price right now has been rising quite firmly to reach the key resistance level at $1.1368, which is continuing to hold as we approach the London open. This level looks very likely to be pivotal today. If we get a strong reversal quickly from this level, that will give an attractive short trade entry. If we get two consecutive higher hourly closes above $1.1368 after the London open, we will likely see the price continue to rise to at least $1.1418.
Regarding the USD, there will be a release of Retail Sales data at 1:30pm London time followed by the FOMC Meeting Minutes at 7pm. There is nothing of high importance due today concerning the EUR.
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