EUR/USD Forex Signal: Choppy Action

The euro is holding up relatively well against the stronger dollar.

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 $1.0545.

Today’s EUR/USD Signals

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 $1.0540.
• 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.
• 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 Trade Ideas

• Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0457 or $1.0391.
• 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.
• 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.

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EUR/USD Analysis

I wrote yesterday that the best approach to this currency pair would probably be to look for a reversal at either of the nearest support or resistance levels on short time frames as I expected the action to be dull.

This was not a good call as the price rose strongly early in the day before falling back.

The price has returned to approximately where it was this time yesterday, again trading between nearby support and resistance levels. This makes it very difficult to take a directional bias.

The best I can say is that the support level at $1.0457 looks strong and likely to hold well, so if the price does fall – and today the US Dollar does seem to be stronger, so it may happen – I think a bullish bounce there on a short time frame could provide a good scalping opportunity.

We may see more movement in the Euro when British CPI (inflation) data is released later.

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