EUR/USD Forex Signal: Bearish Channel Persists – DailyForex.com

New support level at 1.1800 looks likely to be pivotal today.

Last Thursday’s EUR/USD signals produced a losing long trade from 1.1786 and a winning short trade from 1.1823.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken before 5pm London time today only.

  • 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.

  • 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

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1798, 1.1783, 1.1754, or 1.1733.

  • 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.

  • 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 we had a short-term bullish development evidenced by the breakout above the short-term descending trend line which was within the wider bearish price channel. However, I also said that the long-term bullish trend would not be fully invalidated until the price got established above 1.1850 which was the truly pivotal level for aspiring bulls.

Due to the ECB policy release I thought that the best approach would be to trade a reversal from a price extreme that hit a support or resistance level on a short time frame.

This was a good call as the bearishness eventually resumed following a failure by the price to even reach, let alone break above, the resistance level identified at 1.1850. Following the ECB release, traders on short time frames had a good chance for a profitable short trade from the bearish reversal at 1.1823.

The long-term wide bearish price channel remains intact, with a long-term valid bearish trend which may yet push prices to new lows. However, the pace of the downwards trend has become very slow, and the price has been very reluctant to break below the psychological quarter-level and horizontal support at 1.1750.

We have a new support level at 1.1798 confluent with the round number at 1.1800. If this breaks down, we are likely to see a fall to 1.1783 at least.

If the price does not close today in New York below 1.1766 I will start to doubt the long-term bearish trend, or at least expect it to proceed only extremely slowly.

EUR/USD

Regarding the USD, there will be a release of CB Consumer Confidence data at 3pm London time.

There is nothing of high importance oncerning the EUR scheduled for today.

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