Forex Signal for EUR/USD: Supportive Pivot at $1.0636
Today’s EUR/USD Signals
Risk 0.75%.
Trades may only be taken before 5 pm London time today.
Short Trade Idea
- On the next touch of $1.0732, go short after a bearish price action reversal on the H1 timeframe.
- Set the stop loss 1 pip above the current swing high in the area.
- Once the trade has 20 pip profit, move the stop loss to break even.
- When the price reaches a profit of 50 pip, take 50% of the position as profit and let the other 50% ride.
Long Trade Ideas
- Immediately after a bullish price action reversal on the H1 timeframe, on the subsequent touch of $1.0636 or $1.0568, go long.
- Put your stop loss one pip below the current swing low for the area.
- Once the trade has 20 pip profit, move the stop loss to break even.
- When the price reaches a 20 pip profit, take 50% of the position as profit and let the other 50% ride.
The best way to spot a classic "price action reversal" is for an hourly candle to close with a higher close, such as a pin bar, doji, outside, or even just an engulfing candle. You can profit from these levels or zones by observing the price action that occurs at the specified levels.
EUR/USD Analysis
In my previous analysis of the EUR/USD currency pair, I predicted that the support at $1.0662 would be the pivotal point of the day - if it broke down convincingly, I predicted that the price would quickly fall to the next support level below it at $1.0602.
This was a fairly good call, as the level was broken and the price reached $1.0602 the next day, but it took several hours and several deep pullbacks for that to happen.
Yesterday, the Euro showed significant strength and advanced against the US dollar for a few hours before falling back. Technically, the price is currently at an interesting point, as it attempts to break below what appears to be pivotal support at $1.0636.
If we get two consecutive lower hourly closes below $1.0636, we can expect a further drop. However, there are two issues with this: first, key Eurozone inflation forecast data is due, which may cause volatility if it differs from the expected annualized rate of 8.3%; second, the US Dollar Index is facing strong resistance and may not be able to rise much further.
For these reasons, I believe the best approach to trading this currency pair today would be a short-term, scalp-style short trade following a breakdown of $1.0636, with the next support level at $1.0568 as the target.
If the price fails to break below $1.0636, we could see another strong upward price movement, but I believe it will fade away quickly, as it did yesterday.
The Eurozone Flash Estimate CPI data for the Eurozone will be released at 10 a.m. London time. There is nothing significant due today in terms of the USD.