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Wide range continues to hold between $1.0920 and $1.1089.
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.
There is nothing of high importance due today concerning either the EUR or the USD.
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