My previous EUR/USD signal on 11th December was not triggered, as the bullish price action happened below my identified support level at $1.0499.
Today’s EUR/USD Signals
- Risk 0.75%.
- Trades may only be taken before 5pm London timetoday.
Short Trade Idea
- Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0542, $1.0610, or $1.0638.
- 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 ride.
Long Trade Ideas
- Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0480 or $1.0425.
- 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 ride.
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 EUR/USD analysis one week ago, I wrote that we were seeing a technical decline driven by a completed bearish head and shoulders chart pattern, and that the price would likely reach $1.0500, which would probably be a pivotal point.
This was a good call as the price did reach $1.0500, however this level was not very pivotal. The day closed just below that level but only by a little bit, before it bounced back.
We have now seen a higher low and a double bottom as bullish patterns basing off the support level shown in the chart below at $1.0480. This looks like very solid support.
The short-term technical picture looks bullish despite the long-term bearish trend.
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Upside is likely to be limited, but if the next key support or resistance level reached will be $1.0480, and we get a bullish bounce there, I would be ready to enter a conservative long trade looking to take profit above $1.0528.
The price is likely to range little before the big US Federal Reserve policy meeting which will be held a couple of hours after today’s London session ends.
If the Fed passes on a rate cut (very unlikely), the Dollar will soar, but a more likely surprise will be in the Fed’s forecast for next year’s path of further rate cuts. Any surprises there will move the USD.
There is nothing of high importance due today concerning the Euro. Regarding the USD, there will be a release of the Federal Funds Rate, Economic Projections, and Statement at 7pm London time.
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