EUR/USD Forex Signal

Yesterday’s signals may have produced a short trade following the bearish doji candlestick at 1.1539, but this only gave the minimum 20 pips of profit before turning around to break even.

Today’s EUR/USD Signals

Risk 0.75%.

Trades may only be taken before 5pm London time today.

Short Trades

• Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1594 or 1.1633.

• 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 run.

Long Trade

• Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1515 or 1.1480.

• 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 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.

EUR/USD Analysis

I wrote yesterday that we had an ambiguous situation with the bearish trend line nearby, which now must be drawn as two trend lines, with the price currently sitting in between them. There was also bullish action at support below, which made me uncertain. However, I did point out that a break above 1.1539 would be a bullish sign, and after we got that break early on the price continued to rise by more than another 30 pips, so this was an OK call.

The situation in the market is dominated by the U.S. Dollar and stock markets, both of which are falling. This has led to a movement into safe-haven currencies, and these days, the Euro partially qualifies as that, which is why we see the price here acting bullishly. If the sentiment persists, we should see a further rise today, but there is U.S. inflation data due later which could change the market’s sentiment at least to some extent.

There is no long-term bullish trend in this pair, which complicates taking a bias. I again take no bias today but note the situation is more bullish and that a sustained break above 1.1600 would be a very bullish sign.

There is nothing important due today concerning the EUR. Regarding the USD, there will be a release of CPI data at 1:30pm London time.