Yesterday’s signals produced a profitable long trade following the bullish doji + outside candlestick combination rejecting the support level identified at 1.2208.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken between 8am and 5pm London time today only.
Long Trade
-
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.2005.
-
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.
-
Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to run.
Short Trade
-
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2359.
-
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.
-
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 was correct yesterday to maintain a bullish bias, as there was a bounce from an identified support level that gave quite a lot of pips of profit, for any trader nimble enough not to overstay in the trade. However, the price fell back to an area below that former support, and now the picture looks considerably more bearish. The price chart below shows we have a bearish head and shoulders pattern rejecting the 1.2300 area, which coupled with the break of the former support, presents a more bearish picture, despite the long-term bullish trend. Another factor is the relatively high volatility, which is usually not good for trading with the trend. Finally, we are a long way from any clear support or resistance levels which can be clearly identified. What this all adds up to is that it is extremely difficult to predict what is most likely to happen today, so I have no bias until tomorrow. The flow is now suggesting lower highs and lows are taking place, is the best that can be said.
There is nothing important due today concerning the EUR. Regarding the USD, there will be a release of Building Permits data at 1:30pm London time, followed by Crude Oil Inventories at 4pm.
Recommended Content
Editors’ Picks
EUR/USD holds below 1.0750 ahead of key US data
EUR/USD trades in a tight range below 1.0750 in the European session on Friday. The US Dollar struggles to gather strength ahead of key PCE Price Index data, the Fed's preferred gauge of inflation, and helps the pair hold its ground.
USD/JPY stays firm above 156.00 after BoJ Governor Ueda's comments
USD/JPY stays firm above 156.00 after surging above this level on the Bank of Japan's decision to leave the policy settings unchanged. BoJ Governor said weak Yen was not impacting prices but added that they will watch FX developments closely.
Gold clings to modest daily gains at around $2,350
Gold stays in positive territory at around $2,350 after closing in positive territory on Thursday. The benchmark 10-year US Treasury bond yield edges lower ahead of US PCE Price Index data, allowing XAU/USD to stretch higher.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
US core PCE inflation set to signal firm price pressures as markets delay Federal Reserve rate cut bets
The core PCE Price Index, which excludes volatile food and energy prices, is seen as the more influential measure of inflation in terms of Fed positioning. The index is forecast to rise 0.3% on a monthly basis in March, matching February’s increase.