(MENAFN- Daily Forex) Last Thursday's EUR/USD signal was not triggered as none of the key support or resistance levels which were identified that day were reached during the London session.Today's EUR/USD Signals
Risk 0.75%.
Trades must be entered before 5pm London time
- Go short following a bearish price action reversal on the H1 time frame. immediately upon the next touch of $1.1394 or $1.1456.
- 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 Ideas
- Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of $1.1305 or $1.1251.
- 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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I wrote last Thursday that there was clearly an active and strong bearish trend, with all the technical, fundamentals, and sentimental factors working in favour of the US eollar and against the euro. The price was falling to new long-term lows with strong bearish momentum and my only question was where support would begin to hold. I did not see any reason why the nearest support level at $1.1195 would be a long-term low. I thought that the best opportunity would be a short trade from a retracement to the resistance level at $1.1234 which looked likely to hold.
As it turned out, we had already seen at least a medium and possible long-term low at $1.1195, although I had no good reason to call this reversal at the time. The price did not reach $1.1234 later that day anyway.
The price over the next days went on to break strongly above $1.1234 and continue to rise higher with some strong bullish momentum. The bullish reversal was caused by the discovery of a new coronavirus variant which might evade vaccines and cause a big economic impact. This sent the euro soaring for a while, as in this circumstance the US dollar is less favoured as a safe haven when risk-off sentiment dominates the market.
The jury is still out on the impact of omicron. In the meantime, markets are nervous and volatile.
Technically, we see a medium-term bullish picture , with the price finding support last Friday at the $1.1234 level. We now see higher support at $1.1305, confluent with the round number, and the price is making a bullish consolidation there. It seems poised for a further advance.
The best approach here today is to look for a long trade from the next bounce at $1.1305 and then manage the trade carefully on a short time frame .
I think the resistance level just below $1.1400 is very likely to hold today unless we get some dramatic news later today about omicron or if any FOMC member of Janet Yellen say something surprising.
There is nothing of high importance due today concerning the EUR. Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time, followed by the Treasury Secretary Janet Yellen speaking at 2pm and FOMC members speaking from 4pm to 5pm.
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