(MENAFN- Daily Forex) Yesterday's signals were not triggered as there was no precise bearish price action when the resistance level at 1.1596 was reached, but the level did hold strongly and accurately and could have been used to enter a profitable short trade on a lower time frame.
Today's EUR/USD Signals
Risk 0.75%.
Trades must be entered between 8am and 5pm London time today, over the next 24-hour period only.
Short Trades
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Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1596 or 1.1648.
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Place the stop loss 1 pip above the local swing high.
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Adjust the stop loss to break even once the trade is 20 pips in profit.
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Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
Long Trades
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Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1496 or 1.1467.
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Place the stop loss 1 pip above the local swing high.
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Adjust the stop loss to break even once the trade is 20 pips in profit.
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Remove 50% of the position as profit when the price reaches 25 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.
EUR/USD Analysis
I wrote yesterday that I had no directional bias, but I should have had more confidence in the generally bearish trend as I was accurate in noting that a failed test of 1.1600 would push the price down to 1.1550, which is what has happened. The price still looks a little bearish, but I have three reasons for caution. Firstly, the British Pound looks weaker than the Euro, which suggests the better short trade will be in GBP/USD. Secondly, the Bank of England is releasing its policy report today, which could create unpredictable and volatile movements in the Euro as well as the British Pound. The third reason is that we see lower wicks on all recent candles which have traded below the 1.1550 area, which suggests that we are seeing long-term buying whenever the price gets close to the important psychological level of 1.1500.
I have no directional bias today, but if I had to pick a direction, I would be bearish due to the strong Dollar and long-term bearish trend in this pair, as well as the fact that key resistance levels have tended to hold firmly recently.
There is nothing important due today concerning either the EUR or the USD.
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