SIGNAL FOREX

EUR/USD Forex Signal: A Weakly Bullish Reversal – DailyForex.com


The bullish reversal has been quite weak, but it picked up a little steam yesterday as the price managed to break up above the bearish descending trend line.

Last Monday’s signals were not triggered as the bullish price action took place below the support level identified at 1.2060.

Today’s EUR/USD Signals

Risk 0.75%.

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

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.2178 or 1.2227.

  • 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 time frame immediately upon the next touch of 1.2139 or 1.2107.

  • 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.

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EUR/USD Analysis

I wrote last Monday that the nearby support level at 1.2060 looked vulnerable but that the next support level below that, at 1.2005, may be strong as it was so confluent with the major round number at 1.2000.

This was an indifferent call, as the price made a bullish reversal between 1.2005 and 1.2060.

The bullish reversal has been quite weak, but it picked up a little steam yesterday as the price managed to break up above the bearish descending trend line which is drawn within the price chart below. We have also seen new higher support levels established.

The long-term trend of risky assets rising and the U.S. dollar falling has reasserted itself, although the euro is not one of the strong gainers.

I am not strongly confident about the likely direction of the price of this currency pair today, but it seems as if the price will continue to rise and reach 1.2178 where it might find firm resistance.

I would be prepared to take a short-term trade from a bearish reversal at 1.2178 today.

EUR/USD chart

There is nothing of high importance scheduled today regarding the EUR. The USD may be impacted by President-elect Biden’s inauguration speech at 5 PM London time.

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