Forex Signals ? EUR/USD Bulls Keep Pushing

Signal posted on July 7, 2010, at 6:11 am GMT |

Recap: Slow day yesterday, but it always is after a holiday. I had a single-lot long from 1.2500 yesterday (taken before yesterday?s signal, it never dropped back down for anyone to re-enter) which I closed at 1.2600 for 100 pips profit. Bulls were able to push forward against yesterday pushing the pair up nearly 180 pips from low to high before stalling out around 1.2660.

Daily Outlook: I get a sinking feeling every time I go long in this market as the long-term trend is down, however for my day trading I have to go with the direction of the shorter-term trend and this short-term trend is definitely bullish.

We just closed out a bullish head and shoulders pattern on the daily charts, the pair continues to make higher highs and higher lows and we may have just entered a bullish channel.

Watch out for Eurozone economic numbers on the forex calendar tomorrow.

Trading Idea: The bottom of the bullish channel offers some good risk/reward setups with the support currently between 1.2500-1.2530. From 1.2515 targets would be 1.2540, 1.2570, 1.2600 and 1.2630 for 115 pips profit. A close below 1.2470 on 4h chart negates the trade (this is also where I will look to hide a stop).

Beyond that the most conservative trade would be to wait for a pullback to the 1.2400 support with targets up to 1.2600 for 200 pips (good risk/reward setups off this level).

The most aggressive trade would be a long off of 1.2570 as this is the neckline area of the head and shoulders pattern. A close below this level on the daily charts indicates the neckline breakout was false and the head and shoulders signal was invalid.

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