2023-05-22 09:26:13
The pair started giving up its gains in the previous Asian session.
My previous recommendation of May 9 for the EURUSD trade did not work as none of the key levels I identified during the London session that day were reached.
Today’s recommendations for trading the EUR/USD currency pair
- The risk is 0.75%.
- Trades may only be taken before 5pm London time today.
Sell trading ideas
- Take a sell trade following the downside price action reverses on the time frame right on the next touch of $1.0835, $1.0848, $1.0871, or $1.0884.
- Set the stop loss 1 pip above the local swing high.
- Move the stop loss order to break even once the trade is 20 pips in profit.
- Take 50% of the position as profit when the price makes 50 pips in profit and allow the rest of the position to run.
An idea for a buy trade
- Take a long trade following the price action reverses to the upside on the timeframe right at the next touch of $1.0782.
- Set your stop loss 1 pip below the local swing low.
- Move the stop loss order to break even once the trade is 20 pips in profit.
- Take 50% of the position as profit when the price makes 20 pips in profit and allow the rest of the position to run.
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 an engulfing candle with a higher close. You can exploit these levels or areas by observing the price action that occurs at the specified levels.
In my previous analysis of EURUSD trading, I wrote that the wide range is likely to continue once more today, so trading a reversal from the $1.0920 support or $1.1089 resistance should be acceptable trades.
This was a good prediction because the range held, but since neither extreme was reached, no trading signal was generated.
The technical picture has changed a lot over the past two weeks or so, as the US dollar has made a solid run once morest the long-term trend to the downside. After showing relative strength, the Euro has weakened to the point where it is weaker than the British Pound, which is usually a bearish sign for the Euro.
Looking at the price chart below, we can see a clear succession of lower highs and lower lows, which is another sign of a bearish trend in the medium term. However, we have seen a rally in prices and the Asian session still looks positive for the Euro, in addition to a new support at $1.0782.
Unfortunately for the bulls, there are several resistance levels very close to each other, starting at $1.0835. It would be a bullish sign if the price can stabilize above this level, and even if it does, it is unlikely to go much higher.
I see the best opportunity that might arise in this pair today with a sell trade following a strong downside rejection of the resistance level at $1.0835.
Graph generated by platform TradingView
There is nothing expected today regarding the EUR or the USD.
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