EUR/USD Signal 21/01: Driven By EU/Trump Tensions (Chart)

(MENAFN- Daily Forex) My previous EUR/USD signal on 14th January was not triggered.

Today's EUR/USD Signals

Risk 0.75%.

Trades may only be entered prior to 5pm London time today Trade Ideas

• Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.1760, $1.1766, or $1.1808.
• 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 $1.1710, $1.1672, or $1.1633.
• 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.

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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/USD Analysis

In my previous EUR/USD analysis published one week ago, I thought that the EUR/USD currency pair was likely to continue to trade lower towards support, and that any bullish bounce there would be short-lived. This was an accurate call on the day.

The picture now is very different. Yesterday saw a sharp rise in this currency pair. The rise peaked at the resistance level of $1.1760. The price has been slowly fizzling off this high and forming a kind of pennant which is typical of exhaustive uncertainty, although the supportive floor at $1.1710 looks likely to be pivotal.

Although we have well-defined technical levels, probably the next major moves in this currency pair will be determined by what President Trump and EU leaders say at Davos about the Greenland dispute and related tariffs. We are in a situation where both sides might impose new tariffs on each other, and that is something that is always going to affect the relative values of currencies. If and when that happens, technical levels will become irrelevant. Yet before we get any new information, the price is likely to range between $1.1710 and $1.1760.

If the price gets established below $1.1710, we might see a further sharp fall.

If you do want to scalp the technical levels, just keep in mind that one word from Trump or the EU can easily blow the price right through your stop with inevitable slippage, so don't scalp this with high leverage. Also, if there is any major surprise with the PCE data release later, that could push the price through one or two levels.

EURUSD Chart by TradingView

There is nothing of high importance due today regarding the Euro. Concerning the USD, there will be a release of Core PCE Price Index data at 3pm London time preceded by Final GDP data at 1:30pm.

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