An extremely downward-looking environment

Slight correction to the upside after 19-year lows.


Trading is risky.

My previous recommendations on June 22nd for trading the EURUSD were not activated as there was no price action to the downside when the price first hit the resistance I set at $1.0540.

Today’s recommendations for trading the EUR/USD currency pair

  • The risk is 0.75%.
  • Trades must be made before 5pm London time today only.

Selling trading idea

  • Take a sell trade after the price action reverses to the downside on the H1 time frame right on the next touch at $1.0280.
  • Set your stop loss 1 pip above the local swing high.
  • Set the stop loss order to break even once the trade has made a profit of 20 pips.
  • Take 50% of the position as profit when the price makes 50 pips in profit and let the rest of the position work.

Buy trading ideas

  • Take a long trade right after the price action reverses to the upside on the H1 timeframe on the next touch of $1.0200, $1.0150, $1.0100 or $1.0050.
  • Set the stop loss point below the local swing low.
  • Set the stop loss order to break even once the trade has made a profit of 20 pips.
  • Take 50% of the position as profit when the price makes a profit of 20 pips and let the rest of the position work.

The best way to identify a classic “price action reversal” is to close an hourly candle, such as a pin bar, doji, outside candle or even just a sunken candle with a higher close. You can exploit these levels or areas by observing the price action that occurs at the specified levels.

EUR/USD trading analysis

In my last analysis of the EURUSD currency pair over two weeks ago, I found it very difficult to predict the likely direction of the price. Things have changed a lot since then, especially over the past couple of days, as the Euro has seen a sharp fall against the US Dollar. The US dollar is hitting long-term records, while the EURUSD pair hit 19-year lows for two consecutive days.

There is a strong downward trend.

It is important that the EUR fell strongly again yesterday, even after most of the other currencies started to perform better against the USD. This indicates a particular weakness in the Euro.

Technically, there is a very strong long-term trend to the downside, and the price is trading in blue sky at levels not reached in many years. The volatility is also high. These factors indicate that the possibilities remain with the bears and that we are likely to see lower prices yet over the coming days.

We are currently seeing a small correction to the upside which is unusual. The closest major level is the support at $1.0200. If this does not hold, this will be the first sign of another downward movement on its way.

The only major support levels I see are likely to be half or whole numbers.

I think the best approach here would still be to look for short trades. A reversal at $1.0280 would be an ideal setup but the quarter figure at $1.0250 could also be an important level and produce a strong bearish reversal.

I will not be making a long trade in this currency pair today.

Daily chart of the euro against the US dollar
The chart was generated by . platform TradingView

There is nothing significant expected today for either the EUR or the USD, although there will be releases of EU economic forecasts and comments from Fed members later that could cause some price action.

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