Today’s EUR/USD Outlook
Risk allocation: 0.75%.
Execute trades before 5 PM London time.
Short Position Scenario
Consider a short position upon observing a bearish price reversal on the hourly chart (H1) at $1.0457, $1.0479, or $1.0542.
Set the stop loss one pip above the preceding swing high.
Adjust the stop loss to breakeven after a 20-pip profit.
Secure 50% of profits at 20 pips and let the remaining portion run.
Long Position Scenario
Look for long opportunities following a bullish price reversal on the H1 chart at $1.0387, $1.0348, or $1.0322.
Position the stop loss one pip below the most recent swing low.
Move the stop loss to breakeven after the trade gains 20 pips.
Take 50% profit at 20 pips and allow the rest of the position to continue.
Identifying Price Action Reversals
A classic price action reversal can be identified by a closing hourly candle forming a pin bar, doji, outside bar, or engulfing candle showing a higher close. Use price action at these zones for entry signals.
EUR/USD Market Overview
In a prior analysis from two weeks ago, a bullish outlook was favored, and a long scalp at $1.0392 was suggested. Although it ultimately played out, the delayed reaction diminished its usefulness. The $1.0457 resistance held, providing a short trade opportunity.
Currently, the technical landscape suggests a stronger bullish bias, with a bullish over/under pattern rejecting lows below $1.0250. Furthermore, a bullish breakout has occurred past the $1.0387 resistance.
Given the absence of a clear long-term trend, prioritize shorter-term price action, which remains bullish above $1.0387. A retest and bounce could offer a long entry, but profit targets should be monitored closely due to potential limited upside.
Dollar weakness is widespread but could reverse during the Tokyo session tonight.
Economic Calendar
Eurozone data is light today. The US will release the ADP Non-Farm Employment Change forecast, followed by ISM Services PMI at 3 PM London time.
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