EUR/USD Forex Signal: Strong Bearish Move Continues – DailyForex.com

The price is trading near 1-year lows below $1.1338.

Last Thursday’s EUR/USD signal was not triggered as the bearish price action took place slightly above the resistance level I had identified at $1.1467.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be entered before 5pm London time today.

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of $1.1338, $1.1371, or $1.1394.

  • 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 20 pips in profit and leave the remainder of the position to run.

Long Trade Ideas

  • 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 last Thursday that after making a daily (New York) close below $1.1529, the price was continuing to fall strongly to new 1-year lows. I thought that the price now had room to fall all the way to the next round number at $1.1400 without encountering any support, and that the day was very likely to be a down day.

This was an excellent call and my bearish bias paid off, although it did take a little longer than I expected for the price to reach $1.1400. Last Thursday was also a down day, as I had forecast.

The price made a strong downwards push during yesterday’s Asian session and reached close to $1.1250 before making quite a strong bounce. This meant that on some price charts, depending upon the time zone used, yesterday’s daily candlestick will appear as a bullish pin bar. While it is possible that we may see a move higher today, do not be fooled by this pin bar – the real test now is whether the nearest resistance level at $1.1338 will hold.

There still seems to be bearish momentum provided the price is below $1.1338, which it is now, so I still expect to see lower prices today and over the course of the coming days.

The US dollar has made a small recovery, but is holding above key support, and the euro remains weak after the ECB appeared to rule out a rate hike in 2022. It seems the euro is the key driver in this pair, but the long-term bullish trend in the US dollar certainly helps the bearish case here.

I maintain a bearish bias and continue to see a short trade opportunity here. The best set-up would be a firm bearish rejection of the resistance level at $1.1338.

EUR/USD

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

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