EUR/USD Signal Update

Yesterday’s signals were invalidated as although the price did reach 1.0987, there was an hourly close above that level. This is unfortunate, as the area did in the end act as strong resistance.

Today’s EUR/USD Signals

Risk 0.75%

Trades must be made between 8am and 5pm London time only.

Long Trade 1

• Go long following a bullish price action reversal on the H1 time frame immediately upon the first test of 1.0617.
• 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 trade is 20 pips in profit and leave the remainder of the position to run.

Short Trade 1

• Go short following a bearish price action reversal on the H1 time frame immediately upon the next test of the bearish trend line at 1.1000.
• Place the stop loss 1 pip above the local swing high.
• Move the stop loss to break even once the trade is 30 pips in profit.
• Remove 50% of the position as profit when the trade is 30 pips in profit and leave the remainder of the position to run.

EUR/USD Analysis

Yesterday was a significant day for this pair. The price was rising very bullishly and threatening the key 1.1000 level when the U.S. pushed the price down. It then subsequently rallied climactically all the way up to 1.1025, hitting a major medium-term bearish trend line. It then reversed sharply, falling by more than 125 pips during the early part of the New York session. There is local support formed by a previous daily high and low at around 1.0890 – 1.0880, and this area has held so far. The price has recovered a little early this morning, but it looks quite flat.

This pair does have a tendency to double back just when you least expect it, but this fast drop off a major trend line and the key 1.1000 has a good chance of being significant, so I expect a continued move down over the coming days to be the most likely scenario. This will probably be signified by a break below 1.0880.

There are high-impact events scheduled today concerning both the EUR and the USD. At 9am London time there will be a release of German IFO Business Climate data. Later at 12:30pm there will be a release of U.S. Core Durable Goods Orders data.