Most likely we saw a major trend reversal.
My previous recommendations on May 19th to trade EURUSD were not activated as there was no downside price action when any of the key resistance levels identified that day were reached.
Today’s recommendations for trading the EUR/USD currency pair
- The risk is 0.75%.
- Trades must be made between 8am and 5pm London time today only.
Selling trading idea
- Take a sell trade following the price action reverses to the downside on the H1 time frame right on the next touch at $1.0824.
- Set your stop loss at 1 pip above the local swing high.
- Set your stop loss order to break even once the trade has made a profit of 20 pips.
- Take 50% of the position as profit when the price makes 50 pips in profit and let the rest of the position work.
Buy trading ideas
- Take a long trade right following the price action reverses to the upside on the H1 time frame on the next touch of $1.0745 or $1.0697.
- Set your stop loss 1 pip below the local swing low.
- Set your stop loss order to break even once the trade has made a profit of 20 pips.
- Take 50% of the position as profit when the price makes a profit of 20 pips and let the rest of the position work.
The best way to identify a classic “price action reversal” is to close an hourly candle, such as a pin bar, doji, outside candle or even just a sunken candle with a higher close. You can exploit these levels or areas by observing the price action that occurs at the specified levels.
EUR/USD trading analysis
I wrote on May 19 that despite the long-term trend to the downside and the price hitting a multi-year low just one week ago, the price has been steadily rising, hitting higher lows and new higher support levels.
I thought the bulls had an advantage in the short term but they might not be able to push the price much higher.
This was a good expectation in part as today was a strong day, so I was right that bulls have an advantage in the short term. However, I was very skeptical regarding the price’s ability to make a stronger, longer-term move to the upside, and that’s what we’ve seen over the past couple of weeks.
The main driver of the bullish momentum we are now seeing in this currency pair is the weakness of the US dollar, although the Euro is a relatively strong currency, helping the bulls here. The US dollar saw a strong sell-off following it appeared to peak near a long-term high in regarding three weeks.
Since it is Monday and the US is on holiday, we may not see more price action, but if you are going to trade this pair today, I think looking for long-term trades will be your best strategy.
I am a bit skeptical of the $1.0745 support level, and I think the $1.0700 area is likely to hold if we get a bounce back to that level.
The chart was generated by . platform TradingView
There is nothing to be expected today regarding the Euro or the US Dollar.
