Euro Sold on Poor Economic Data

Bullish trend in doubt below $1.10 as Dollar strengthens.

My previous EUR/USD signal on 12^th July was not triggered, as unfortunately, the bullish price action took place a bit below the support level identified at $1.1026.

Risk 0.75%.

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

• Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.1089 or $1.1150.
• 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 $1.1014 or $1.0973.
• 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 on 12^th July, I wrote that the

best opportunity that would be likely to arise in this currency pair today would be a bullish bounce at a support level following the CPI data release, which would give a good long trade entry opportunity.

I was very correct about looking to the long side, as the dovish surprise in the US CPI falling to 3.0%, even lower than the consensus forecast, saw the US Dollar sell off strongly, sending the price of this currency pair shooting dramatically higher.

The price then went on to break out to new multi-month highs above $1.1250 but then went on to make what seems to be a very solid bearish reversal from this price area, and we have seen this drop accelerate today on worse than expected Eurozone economic data, which has made the Euro the weakest major currency today.

Technically, the drop below the former support level at $1.1089 is a bearish sign, although the price is currently threatening to break back above this level. Bulls should not get too excited about that, because there can be obvious resistance all the way up to $1.1125 and even higher than that.

The only potentially good opportunity which I see here today is a potential short trade from two consecutive lower hourly closes below $1.1070 after New York opens. Anyone short from this area should be looking to take profits once the price gets to $1.1025 as I expect we will see some initial support as the price approaches the huge round number at $1.1000.

Concerning the USD, there will be a release of Manufacturing & Services PMI data at 2:45pm London time.There is nothing of high importance due today regarding the EUR.

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