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EUR/USD Forex Signal: Bearish Head & Shoulders – DailyForex.com

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EUR/USD: Support at 1.1726 looks very pivotal

Yesterday’s signals produced a predictable move down from 1.1752 to the support level at 1.1726, where a bullish inside candlestick break gave a slightly profitable long trade if not exited at break even.

Today’s EUR/USD Signals

Risk 0.75%.

Trades may only be entered before 5 pm London time today.

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1767, 1.1779, or 1.1803. 
  • Place 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.
  • 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.

Long Trade Ideas

  • Long entry following a bullish price action reversal on the H1 time frame immediately upon the next touch of 1.1726, 1.1684, or 1.1638. 
  • 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.
  • 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 yesterday that I would take a short trade from a bearish reversal at 1.1752. This set up but there was a strong bullish bounce at the next support level of 1.1726 which turned the trade into a loser at worst or a breakeven trade at best.

I think I was right to look to the bearish side as the price is looking more like it will break down. We see the support level at 1.1726 is looking very key as the price seems to be printing a bearish head & shoulders pattern which is angled downwards, with the neckline sitting at 1.1726.

The U.S. Dollar is strong as markets are clearly in “risk-off” mode, and the Euro and British Pound are suffering as the next few days look likely to result in a full “no-deal” exit by the U.K. from the European Union’s trade structures at the end of 2020, which will be detrimental over the short term to both the U.K. and the Eurozone economy.

I will take a bearish bias if we get a bearish reversal at 1.1767, or two consecutive hourly closes below 1.1725 during today’s London session.

EUR/USD

There is nothing of high importance due today regarding the EUR. Concerning the USD, there will be a release of Unemployment Claims data at 1:30 pm London time.

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