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There is a narrowing triangle chart pattern forming.
My previous EUR/USD signal yesterday was not triggered as there was no bearish price action when the price first reached the resistance level which I had identified at $1.0710.
Today’s EUR/USD Signals
Risk 0.75%.
Trades must be taken before 5pm London time today only.
- Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of the descending trend line shown within the price chart below, or $1.0824.
- 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.
- Remove 50% of the position as profit when the price reaches 50 pips in profit and leave the remainder of the position to ride.
Long Trade Ideas
- Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0711, $1.0631, or $1.0600.
- 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.
- 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.
EUR/USD Analysis
I wrote yesterday that it would probably be quite dangerous to do anything else here over the day except for look for a short trade from a bearish reversal from $1.0710. I thought it would be wiser to trade other currency pairs such as the USD/JPY.
This was a good call as the price moved little over the day.
We now await the European Central Bank’s crucial data and policy statements due later today, which is highly likely to produce some volatility in this pair and possible a more definite directional move.
The technical picture sees the price consolidating within a narrowing triangle chart pattern. It is worth keeping in mind that the first breakout after the ECB release will not necessarily be the decisive one, and that the long-term trend is still bearish.
Much will probably be determined by what the ECB hints about its next move on a rate hike – one is not expected today.
Regarding the EUR, the European Central Bank will be releasing it Main Refinancing Rate and Monetary Policy Statement at 12:45pm London time, followed 45 minutes later by the usual press conference. There is nothing of high importance due today concerning the USD.
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