EUR/USD Forex Signal: Strong Bullish Recovery

It is increasingly likely that we have seen a major trend reversal.

My previous EUR/USD signal on 19^th May was not triggered as there was no bearish price action when either of the key resistance levels identified that day were reached.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken between 8am and 5pm London time today only.

• Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0824.
• Put the stop loss 1 pip above the local swing high.
• Adjust the stop loss to break even once the trade is 20 pips in profit.
• Remove 50% of the position as profit when the price reaches 50 pips in profit and leave the remainder of the position to ride.

Long Trade Ideas

• Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0745 or $1.0697.
• Place the stop loss 1 pip below the local swing low.
• Adjust the stop loss to break even once the trade is 20 pips in profit.
• Remove 50% of the position as profit when the price reaches 20 pips in profit and leave the remainder of the position to ride.

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 19^th May that despite the long-term bearish trend and the price reaching a multi-year low only a week ago, the price has been steadily rising, printing higher lows and new higher support levels.

I thought that bulls had the edge over the short term but may not be able to drive the price much higher.

This was a partially good call as the day was a strong up day, so I was right about bulls having the edge over the short term. However, I was too sceptical of the ability of the price to make a stronger, long-term bullish movement, and this is what we have seen over the past couple of weeks.

The main driver of the bullish momentum we are seeing now in this currency pair is US Dollar weakness, although the Euro is a relatively strong currency, which helps bulls here. The US Dollar has been seeing a strong selloff after seeming to peak near a long-term high about three weeks ago.

As it is a Monday and the US is on holiday, we may not see much more price movement, but if you are going to trade this pair today, I think looking for short-term long trades is going to be your best strategy.

I am a bit sceptical of the support level at $1.0745, I think the $1.0700 area is much more likely to hold if we get a retracement to that level.

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There is nothing of high importance due today concerning either the EUR or the USD.