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Approaching Long-Term High Above $1.10


Euro looks to be the strongest major currency today.

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My previous EUR/USD signal on 13th June was not triggered, as there was no bearish price action when the price first reached the resistance level identified at $1.0796.

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 $1.1029, $1.1089, or $1.1125.
  • 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 $1.0963, $1.0899, or $1.0884.
  • 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 said that if the price could get established above the resistance level at $1.0796 after the London open, say with two consecutive higher hourly closes, that will suggest a further upwards move is likely to happen, with the price likely to reach $1.0835 quite quickly.

This was quite a good call as the failure to produce this bullish price action was indicative of the day’s failure to see a significant rise here.

The technical picture has become more bullish since then, with the US Dollar falling even as its yields are rising, and the Euro one of the strongest major currencies as expectations of the ECB’s rate hike path grow increasingly hawkish.

We have seen a firm move up in recent days, and the price is well established above a cluster of former resistance levels which are now likely to have become support. However, the price has now got close to the big round number at $1.1000 which recently acted as an area of strong resistance, capping the long-term high in this currency pair.

For these reasons, I think either a long or short trade could be a good opportunity here today.

If the price continues to rise and soon reaches the next resistance level at $1.1029, this could produce a bearish reversal which might well push the price down to at least $1.0963.

On the other hand, if the price first retraces to $1.0963, and we see a bullish bounce there, that could be an opportunity to go long, targeting at least $1.1029.

EUR/USD

Regarding the USD, there will be a release of Unemployment Claims data at 1:30pm London time, followed by Fed Chair Powell’s testimony before the Senate at 3pm. There is nothing of high importance due today concerning the EUR.

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