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EUR/USD Forex Signal: Consolidation Persists Below $1.1089


Wide range continues to hold between $1.0920 and $1.1089.

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My EUR/USD signal on 3rd May did not technically produce a short trade from the bearish rejection of the key resistance level at $1.1089 right away, but it was an accurate call for the following day which could have given a profitable trade.

Risk 0.75%.

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

  • Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.1089 or $1.1125.
  • 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 50 pips in profit and leave the remainder of the position to run.
  • Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0920, $1.0896, or $1.0878.
  • 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.

In my previous analysis of the EUR/USD currency pair, I wrote the price was trading within a wide range between $1.0920 and $1.1089 and would likely remain there until after the Fed’s rate hike decision.

This was a good call, although even the Fed’s release was unable to breach these boundaries which remain. I was correct about the opportunity to go short from the spike to the resistance level at $1.1089 following the release.

The technical picture remains weakly bullish over the long-term as we have a valid trend, but over the medium-term this consolidation pattern with wide swings is continuing to dominate.

As today is probably going to be a pretty quiet day in the Forex market, it seems likely that the range will again hold today, so trading a reversal from either the support level at $1.0920 or the resistance at $1.1089 should be acceptable trades.

However, the price is not close to support or resistance, so is likely to chop around today without giving much good opportunity.

EUR/USD

There is nothing of high importance due today concerning either the EUR or the USD.

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