EUR/USD Forex Signal: Wide Consolidation Continues| MENAFN.COM

Friday, 12 August 2022 05:42 GMT

EUR/USD Forex Signal: Wide Consolidation Continues


(MENAFN- Daily Forex) My previous EUR/USD signal on 18th July was not triggered as there was no bearish price action when the key resistance level at $1.0121 was first reached.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 timeframe immediately upon the next touch of $1.0211 or $1.0245.
  • 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 50 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 timeframe immediately upon the next touch of $1.0073, $1.0042, or $1.0000.
  • 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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In my last analysis of the EUR/USD currency pair on 18th July, I noted that the level at $1.0121 looked attractive for a short trade entry but that if the price got established above $1.0121 later, it would signify a much deeper bullish retracement.

The level at $1.0121 in the end was not important at all, with the price easily blasting past it, but I was correct about that being significantly bullish, as the price continued to advance over the next days.

The technical picture now is different, as although we have seen the Euro make repeated attempts to rise against what has become a weaker US Dollar, bulls were simply not able to get the price beyond the $1.0300 handle , as there seems to be strong selling every time the price gets close to that area.

On the other hand, we are also seeing strong buying every time the price gets to the $1.0100 area .

This combination of strong buyer with strong sellers produces a no-man's-land area between $1.0100 and $1.0280 within which the price can range .

Despite this overall consolidation, the shorter-term picture looks bearish, with the price breaking below $1.0211 which has held as resistance .

The best strategy today will probably be to look for a reversal off any key level and trade in the direction of the reversal, while being conservative about taking profits. Anyone trading without levels right now should be looking to short on minor pullbacks as they reverse back into the trend.

Any surprise from the Bank of England later (a 0.50% rate hike is expected ) could also cause volatility in the Euro, so that is worth keeping an eye on.

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

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