Sunday, 05 December 2021 10:24 GMT

EUR/USD Forex Signal: Bearish Double Top at 1.1668?


(MENAFN- Daily Forex) Last Tuesday's EUR/USD signal could have produced a slightly profitable short trade entry from the bearish rejection of the resistance level I identified at 1.1668.

Today's EUR/USD Signals

Risk 0.75%.

Trades may only be entered between 8am and 5pm London time

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1668, 1.1688, 1.1711, or 1.1753.

  • 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 20 pips in profit and leave the remainder of the position to ride.

Long Trade Ideas
  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1640, 1.1623, 1.1609, or 1.1567.

  • 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.

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EUR/USD Analysis

I wrote last Tuesday that we were a little likely to see higher prices over the course of today so I would not look to take any short trade below the 1.1753 level.

This was not a great call as the price fell over the day and gave an opportunity for a small but profitable short trade from the bearish reversal which happened at 1.1668.

The technical situation has become more interesting – we are again seeing what looks like a bearish reversal from the same resistance level at 1.1668, suggesting the formation of a bearish double top here. However, at the same time, a symmetrical ascending price channel can be drawn which has contained all the price movement over the past ten days. These price channels, when symmetric, can often be used as powerful technical tools in analysing this currency pair. The channel suggests that the price is likely to rise.

I think the best approach today will be to wait for a downwards movement which tests the lower trend line and ideally confluent support at 1.1609 or 1.1623 after some hours have elapsed. A firm bullish bounce in this location should be a high probability long trade entry signal. On the other hand, if the price breaks down below 1.1609, that will be a bearish sign and could lead to a sharp fall.

There is nothing of high importance today scheduled regarding either the EUR or the USD.

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