(MENAFN- Daily Forex) My previous EUR/USD signal on 3rd
July
produced a profitable short trade following the bearish rejection of the resistance level which I had identified at 0817's EUR/USD Signals
Risk 0.75%. Trades must be entered prior to 5pm London time today.
Short Trade Ideas
Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0856, $1.0884, or $1.0920. 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. 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 timeframe immediately upon the next touch of $1.0795, $1.0779, or $1.0755. 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. 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
In my previous
EUR/USD forecast
on 3rd
July, I wrote that the price of this currency pair was contained within a symmetrical ascending price channel, and that the US Dollar Index was failing to clear an area of key resistance starting at 105.80, which suggested the line of least resistance was upwards.
Although the best day trade which we saw this day here was a short trade from $1.0817, my call was a good one over the longer-term, as the price has continued to rise in quite an orderly way within this price channel. The US Dollar Index rejected key resistance and fell quite heavily last week, becoming the weakest major currency of the week.
The Euro is showing some relative strength despite dropping a bit earlier as the second round of the French Parliamentary election produced a more deadlocked Parliament than was expected, with a far-left alliance surprisingly winning more votes than anyone else.
Despite the surprise in France and the fact that the US Dollar is still technically within a valid bullish long-term trend, I still see the line of least resistance here as likely to be upwards, although the resistance level at $1.0856 may well be too strong to be overcome.
I therefore think the best short-term strategy here will be to take any valid long trade entry, targeting $1.0856. As the upper trend line of the price channel is currently confluent with this level, it will probably be even stronger.
A bullish bounce rejecting the confluence of the round number at $1.0800 and the horizontal support level at $1.0795 would be a great signal for a new long trade entry.
There is nothing of high importance scheduled today concerning the EUR. Regarding the USD, the Chair of the Federal Reserve Jerome Powell will be testifying before the US Senate at 3pm London time.
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