EUR/USD Forex Signal: Potentially Stabilizing Above $1.07 Area – 07 February 2023
Recent downward movement looks like it will begin to halt today.
My previous EUR/USD signal on 23rd January was not triggered, as the bullish price action took place below the support level which I had identified at $1.0864.
Today’s EUR/USD Signals
Trades must be entered between 8am and 5pm London time today only.
Short Trade Ideas
Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of $1.0766, $1.0802, or $1.0876.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.Take off 50% of the position as profit when the price reaches 50 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 timeframe immediately upon the next touch of $1.0692, $1.0634, or $1.0602.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.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.
In my previous analysis of the EUR/USD currency pair, I thought that due to the long-term bullish trend, we should expect the most likely scenario to be the price rising again later and possibly attempting to break above the key resistance level at $1.0937.
This was a fairly accurate call over the medium-term but not useful for trading that day, as the price went down during the London session.
The technical picture a couple of weeks later is considerably more bearish, despite the ECB’s 0.50% rate hike and promise of another 1% in rate hikes during the current cycle, as the US Dollar has strengthened notably over recent days – and it is this which has driven the price down here, with the Euro actually being somewhat stronger than many other currencies, notably the British Pound.
The extremely strong US NFP data release last Friday sent the price strongly lower.
Finally, over recent hours, we are seeing the price beginning to stabilize above the $1.07 handle.
I sense that we are going to see some consolidation here today with the price going sideways until the end of the London session, so a scalp trade off any rejection of either key support or resistance will likely be the best opportunity which could set up here today.
After the London close, Jerome Powell the Fed Chair will be speaking about the US economy at a public but minor event. His words will be closely watched, and US Dollar bears will probably seize on anything he might say to support their case, so we might see a price rise here later in the New York session. Alternatively, there is a chance he might sound quite hawkish on further rate hikes, which would likely send the price below the support level at $1.0692.
Regarding the USD, the Chair of the Federal Reserve, Jerome Powell, will be speaking at a minor event at 5pm London time. There is nothing of high importance due today concerning the EUR.
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