SIGNAL FOREX

EUR/USD Forex Signal: More Bullish on Weak Dollar – DailyForex.com


The dominant story is the renewed weakness we have seen since Thursday in the U.S. Dollar, giving us renewed momentum in the direction of the long-term bearish trend there. This has boosted the price of this currency pair, but the rise here has been slower than in other currencies against the Dollar. 

EUR/USD: Yet strong resistance at 1.1917

Last Thursday’s signals produced a break-even short trade from the strong, volatile rejection of the resistance levels at 1.1849 and 1.1863, but then produced a nicely profitable long trade from the rejection of the support level at 1.1786. It will probably be wise to exit from any remainder of that long trade if the resistance level at 1.1917 is not broken soon.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken between 8 am and 5 pm New York time today only.

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1917, or 1.2005. 
  • Place 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 1.1875, 1.1863, or 1.1849. 
  • Place 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 Thursday that due to the forthcoming input from the U.S. Federal Reserve, we were likely to see more action here including a breakout from the dominant price range. I thought that any breakout would be more likely to be bullish than bearish.

This was a good call as after initially falling sharply, the price found support at 1.1786 and then began to rise firmly, giving an opportunity for a nice long trade from that support level.

Unfortunately, my bullish bias was not triggered on Thursday as I was waiting for two consecutive hourly closes above the nearest resistance level at 1.1850, which did not happen until Friday’s Asian session.

The dominant story is the renewed weakness we have seen since Thursday in the U.S. Dollar, giving us renewed momentum in the direction of the long-term bearish trend there. This has boosted the price of this currency pair, but the rise here has been slower than in other currencies against the Dollar. Although the macro environment is generally favorable to the Euro, it may have run out of steam as it is now close to the major round number at 1.2000 which is the start of a congestive area from a few years ago.

This means the environment is still weakly bullish, so buys from bounces at key support levels should still be worthwhile trades over the next few days, but it is unlikely that we will see the price get beyond 1.2000 any time soon.

I am prepared to take a bullish bias if we get a bounce at any of the three nearest support level.

EUR/USD

There is nothing of high importance due today regarding either the EUR or the USD. It is a public holiday in the U.K. today so trading will probably be thin before the New York open.

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