EUR/USD Forex Signal: Downwards Consolidation to Support Near $1.1000 – 21 March 2022
If the price gets established below $1.1000, it is likely to reach $1.0955.
My EUR/USD signal last Monday was not triggered, as there was no bearish reaction when either of the two resistance levels were reached that day.
Today’s EUR/USD Signals
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 $1.1072, $1.1089, or $1.1142.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 Idea
Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.1018 or $1.0956.Put 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.
I wrote last Monday that there was heavy technical resistance pushing the price lower, and a very strong US Dollar. However, I thought that we may have seen a bullish short-term double bottom if the price could go on to get established above $1.0960. Yet I was really looking for a short trade from a bearish reversal at any resistance level.
There were no good short trade setups that day, and this was not a great call as the price chopped around what I had thought to be the pivotal point at $1.0960. Yet once the price did fully clear that level the situation turned much more bullish. Overall, this was not a great call.
Risk sentiment improved towards the end of last week, with the US Dollar falling out of favour after the Fed announced its 0.25% rate hike – maybe a case of “buy the rumour, sell the fact”. The Forex market then got back into its more typical risk-on mode, which sees a weaker USD and an especially weak JPY, while other currencies such as the Euro rise. This boosted the price of this currency pair.
The price rise here peaked on Thursday, and since then we have seen a weakly bearish and consolidative pattern, with new closer support and resistance levels printing. This points towards lower volatility and more ranging price action. I think it is quite likely that we will see the price remain between $1.1000 and $1.1072 today, but if the price can break below the big round number at $1.1000 it would be likely to fall to $1.0955.
I think the best approach here today is to wait for the price to fall to reach the zone between $1.1000 and $1.1018 and look for a long trade from a convincing bullish bounce there. I think an even better trade will set up if the price can make two consecutive hourly closes not far below $1.1000, providing an attractive short trade entry targeting $1.0955.
There is nothing of high importance due today regarding the EUR. Concerning the USD, the Chair of the Federal Reserve will be giving a minor speech about the economic outlook at 4pm London time.