Bearish Head & Shoulders Pattern

  


Support at 1.1767 looks pivotal today.

Yesterday’s signals were not triggered as there was no sufficiently bullish price action at either of the support levels which were reached during yesterday’s London session.

Today’s EUR/USD Signals

Risk 0.75%.

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

Short Trade Ideas

  • Short entry following a bearish price action reversal on the H1 time frame immediately upon the next touch of 1.1859 or 1.1929.

  • 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 1.1789 or 1.1767.

  • 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 it seemed probable that we would get yet higher prices today, and in this generally bullish technical environment, it seemed wise to look for a long trade from any bullish bounce at a key support level.

This was a good call as the price not an especially correct call as the price turned strongly bearish after initially rising higher, but it was enough to keep out of trouble as support levels did not produce strong enough bounces to trigger any long trade entry. I noted that there were long-term highs just above the current price and the general resistances there seem to have helped hold the price down.

The technical picture now is more bearish as support levels have broken down, but even more importantly we see in the price chart below the final shoulder of what looks like a bearish head and shoulders pattern forming, with a neckline at about 1.1767. Therefore, although the U.S. Dollar is still relatively weak, the Euro is also weakening.

I will take a short trade if we get two consecutive hourly closes during today’s London session below 1.1767.EUR/USD

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





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