SIGNAL FOREX

EUR/USD Forex Signal: Retracing Within Bearish Wedge Pattern – DailyForex.com


The USD has been strong, but we now see improved risk sentiment which has boosted both the Euro and also almost every major currency except the USD and the Japanese Yen.

EUR/USD: Bearish head & shoulders pattern completed

Last Thursday’s signals were not triggered, as there was no bullish price action when the support level at 1.1218 was first reached.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken between 8 am and 5 pm London timetoday only.

  • Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1241 or 1.1258. 
  • 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

  • Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1155. 
  • 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.

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 we needed to see the price get established below 1.1218 or maybe even the round number below at 1.1200 before I could feel really comfortable taking a bearish bias. I was ready to do so if we had gotten two consecutive hourly closes below the nearest support level at 1.1218.

We did get these closes, but the price is more or less now where it was at that time.

The USD has been strong, but we now see improved risk sentiment which has boosted both the Euro and also almost every major currency except the USD and the Japanese Yen.

However, despite the short-term bullish movement, technically we can see that the price here remains firmly contained within a bearish wedge pattern. Additionally, the end of last week saw the completion of a bearish head and shoulders pattern, with the neckline I identified at 1.1218 finally broken.

I think we are likely to see a resumption of the bearish trend, so I will be happy to take any short trades here from any firm bearish reversal which might set up later at any resistance level identified above.

EUR/USD

There is nothing of high importance scheduled today regarding either the EUR or the USD.

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