The euro is the weakest of all major currencies.
My EUR/USD signal on 28th February was not triggered as there was no bearish price action when the price first reached the resistance level identified at $1.1202.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be entered between 8am and 5pm London time today.
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0888.
- 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 ride.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0838 or $1.0710.
- 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 28th February that although the gap to $1.1202 may be filled, this pair was vulnerable to downside movement due to the geopolitical situation being likely to strengthen the Dollar and weaken the Euro. I was very comfortable targeting at least $1.1100.
This was a good call insofar as I was on the right track, and the pair has continued to fall strongly. The market today is unusually clear and simple – the ongoing Russian invasion and occupation of Ukraine, and the small but real threat of a wider war in Europe, not to mention the economic impact upon Europe of scarcer and more expensive energy, are strongly weakening the Euro against almost all other major currencies. The US Dollar is not the strongest, but it is relatively strong, so the price continues to exceed 18-month lows, trading as low as $1.0821 during the Tokyo session.
This is a market situation where technical factors will be relatively unimportant, with sentiment and economic fundamentals dominating. However, the price is currently pausing after retracing to $1.0888, which was supportive and now seems likely to have flipped to become new lower resistance. If the price remains below this level, it will be likely to fall hard later today, giving another good short trade opportunity. If the price gets established above that level, we will likely get a deeper bullish retrace before the downwards movement resumes.
There is nothing of high importance due today regarding either the EUR or the USD.
Source link
