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My EUR/USD signal on 29th March was not triggered as the bearish price action took place above the resistance level which I had identified at $1.0854.
Risk 0.75%.
Trades may only be taken before 5pm London time today.
- Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.1025 or $1.1056.
- 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 50 pips in profit and leave the remainder of the position to ride.
- Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0937, $1.0896, or $1.0878.
- 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.
In my previous analysis of the EUR/USD currency pair, I thought that the best trading strategy here today would be scalping reversals at any key support or resistance level, especially at the extremes.
This was an OK call as the price did little but range that day.
The technical picture is quite different now, almost three weeks later – the price has powered upwards to make a new long-term high and validate a new long-term bullish trend after it rose to a high of $1.1075 last week.
The price has pulled back considerably since then, but deep pullbacks are typical in this currency pair, so trend traders long here will typically be using wide stops.
It is worth noting that EUR/USD has historically trended very reliably, so Forex traders should be interested in trying to rise this bullish trend if they pay attention to precedent.
Drilling down to the hourly time frame, which is shown within the price chart below, we can see that although the price has been rising over the last several hours, the wave pattern is still one of lower lows and lower highs. However, the price action has almost changed that – the price just needs to get established above $1.1000 to make a convincing higher high.
The next hurdle for bulls will be the resistance at $1.1025.
I am happy to stay in my long trade here with a wide stop, even if the price retraces to the support level at $1.0937 or even lower. A long trade from a bullish bounce at that level following another bearish retracement, or even at $1.0950, would be attractive.
The current price action is not especially bullish, but I think its always worth respecting long-term trends in this currency pair.
Concerning the USD, there will be a release of the Empire State Manufacturing Index at 1:30pm London time. There is nothing of high importance due today regarding the EUR.
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