EUR/USD Forex Signal: Significant Resistance at $1.0121

ECB meeting this Thursday will be important for the EUR.

My previous EUR/USD signal last Tuesday could have produced gave a profitable long trade from the support level I had identified at parity ($1.0000).

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken before 5pm London time today.

• Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0121 or $1.0221.
• 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 $1.0073, $1.0042, or $1.0000.
• 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.

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EUR/USD Analysis

In my last analysis of the EUR/USD currency pair on Tuesday last week, I noted the extremely bearish technical picture, so I thought that the price should be able to continue to move down easily.

I saw a potential short trade opportunity from pullbacks that then revert into the trend (especially in the $1.0050 area) but was watching out for a bullish reversal at or below parity.

This was a good call at least insofar as my warning about a potential bullish reversal from the parity level, although the price did break below $1.0000 later in the week.

The technical picture is now much less bearish as we are seeing a bullish over and under pattern with Friday’s low near the support at $1.0000. However, bulls are now facing very strong resistance at $1.0121 which is a major inflection point within the dramatic last week of trading.

This level at $1.0121 looks attractive for a short trade entry if it is reached and if there is a reversal there. On the other hand, if the price gets down to parity again, there seems to be strong buying at and below $1.0000, so that could be an interesting level for a long trade.

If the price gets established above $1.0121 later, that will signify a much deeper bullish retracement into the long-term bearish trend, and a potential trend reversal. The parity level is very significant.

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

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