EUR/USD Forex Signal: Possible Stabilization Above $1.07
Risk 0.75%
Today only, between 8 a.m. and 5 p.m. London time, trades must be entered.
Ideas for Short Trades
- Short entry after a bearish price action reversal on the H1 timeframe on the next touch of $1.0766, $1.0802, or $1.0876.
- Set the stop loss one pip above the current swing high.
- Once the trade is 20 pips in profit, adjust the stop loss to break even.
- When the price reaches 50 pips in profit, take 50% of the position as profit and leave the rest of the position to run.
Ideas for Long Trades
- Long entry after a bullish price action reversal on the H1 timeframe on the next touch of $1.0692, $1.0634, or $1.0602.
- Set the stop loss one pip below the current swing low.
- Once the trade is 20 pips in profit, adjust the stop loss to break even.
- When the price reaches 20 pips in profit, take 50% of the position as profit and leave the rest of the position to run.
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 Forecast
In my previous analysis of the EUR/USD currency pair, I predicted that due to the long-term bullish trend, the price would rise later and possibly attempt to break above the key resistance level at $1.0937.
This was a fairly accurate call in the medium term, but it was useless for trading that day because the price fell during the London session.
Despite the ECB's 0.50% rate hike and promise of another 1% in rate hikes during the current cycle, the technical picture is significantly more bearish a couple of weeks later, as the US Dollar has strengthened significantly in recent days - and it is this that has driven the price down here, with the Euro being somewhat stronger than many other currencies, particularly the British Pound.
Last Friday's release of extremely strong US NFP data sent the price sharply lower.
Finally, the price has begun to stabilize above the $1.07 handle in recent hours.
I believe we will see some consolidation here today, with the price moving sideways until the end of the London session, so a scalp trade on any rejection of key support or resistance will likely be the best opportunity that can be set up here today.
Following the London close, Fed Chair Jerome Powell will speak about the US economy at a public but minor event. His words will be closely scrutinized, and US Dollar bears will almost certainly seize on anything he says to bolster their case, so we could see a price rise here later in the New York session. Alternatively, he could sound quite hawkish on further rate hikes, which would likely send the price below the $1.0692 support level.