EUR/USD Forex Signal: Weakly Bearish Consolidation

Euro is not one of the weaker major currencies, but Dollar is strong.

My previous EUR/USD signal on 30^th May was not triggered as unfortunately the low of the session was a bit below the support level which I had identified at $1.0745.

Today’s EUR/USD Signals

Risk 0.75%.

Trades may only be entered prior to 5pm London time today.

Short Trade Idea

• Go short following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0710.

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

Long Trade Ideas

• Go long following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0631 or $1.0600.
• 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 on 30^th May that we were seeing strong short-term bullish momentum, so I thought that looking for short-term long trades was going to be the best strategy for the day.

This was a good call as the London session that day saw a push up by this currency pair.

The technical picture now is quite different, as we have seen the US Dollar reassert itself in the direction of its long-term bullish trend over recent days. However, the Euro is one of the stronger major currencies, so we are seeing only a slow fall here.

The price chart below shows a slow, choppy, yet decidedly bearish medium-term trend, with the price pushed down by a descending trend line and a key resistance level at $1.0712. If you are going to trade this currency pair today, it will probably be quite dangerous to do anything else except for look for a short trade from a bearish reversal from that level.

It also seems likely that the price will be prone to sudden bullish bounces from $1.0650 or below, so there may not be a lot of short pips on the table for even a successful short trade.

It will probably be wise to trade other currency pairs which are moving more freely today, such as USD/JPY.There is nothing of high importance due today concerning either the EUR or the USD.