The technical picture has become more bearish, with the earlier bullish trend generated by an earlier bullish breakout above $1.1000 becoming invalidated.
My previous EUR/USD signal on 15th January was not triggered as there was insufficiently bullish price action when the support level at $1.0936 was first reached that day.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be entered before 5pm London time today.
Short Trade Ideas
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0909, $1.0932, or $1.0998.
- 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
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0888, $1.0868, or $1.0848.
- 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.
EUR/USD Analysis
In my previous analysis of the EUR/USD currency pair one week ago, I wrote that the Consolidation between $1.0900 and $1.1000 was likely to continue, although I expected an eventual bullish breakout in the coming days or weeks beyond $1.1000. This was a good call for the day, but we finally got a bearish breakdown below $1.0900.
The technical picture has become more bearish, with the earlier bullish trend generated by an earlier bullish breakout above $1.1000 becoming invalidated. In recent hours we have seen the price edge up above $1.0900, but it is now knocking on the nearest resistance level at $1.0909. It is likely that the price will not move much today, giving little trading opportunities except perhaps for scalpers.
The only larger opportunity I see which might set up could be if the price gets established later above the resistance level at $1.0932 as it would then have room to rise to the $1.1000 area, which is likely to be strong resistance – it seems clear there are institutions defending options barriers there.
There is nothing of high importance due today regarding either the EUR or the USD.
More By This Author:
GBP/USD Weekly Forecast - After Some Nervous Selling, Sudden Reversal UpwardsWeekly Forex Forecast - Sunday, Jan. 21
EUR/USD Signal: Another Bearish Flag Pattern Forms
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