Technical Analysis

Bullish Move Running Out of Steam?

The pivotal point today looks likely to be $1.1295.

My EUR/USD signal last Thursday was not triggered as there was insufficiently bullish price action when the price first reached the support levels at $1.1195 or $1.1155.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken before 5pm London time today.

  • Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.1295, $1.1335, or $1.1368.
  • 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.
  • Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.

Long Trade Idea

  • Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.1195.
  • 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.
  • Take off 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.

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

I wrote in my last forecast last Thursday that it seemed very unlikely we would see anything other than a strong US dollar over the day, so I was only looking for short trades.

I saw the most attractive level as $1.1250.

This was a good call overall as the price fell firmly over the London session that day, but unfortunately the price never got back to any of my identified resistance levels first.

The technical picture has now changed, as after reaching a new 18-month low price last Friday, the price has rebounded strongly, breaking resistance levels quite easily and printing some new support on the way up. This bullish retracement within the long-term bearish trend is strong and fast enough to suggest we are unlikely to see new lows soon, so traders here will mostly be looking to ride this new bullish wave until it runs out of momentum.

Bullish momentum may already have run out, as the short-term price action suggests the price is topping out now near the key resistance level at $1.1295. This will probably be today’s pivotal point.

I suggest traders look for a short trade either at a bounce off $1.1295 or if the price begins to break down from its current top during the first two hours after the London open.

Alternatively, if the price does get established above $1.1300 and looks like it will continue to rise over the short-term, traders should consider s long scalp if there is room left to $1.1335 at that point.

EUR/USD

Concerning the USD, there will be a release of the ADP Non-Farm Employment Change Forecast at 1:15pm London time. There is nothing of high importance scheduled today regarding the EUR.

 

Buka akaun dagangan patuh syariah anda di Weltrade.
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