EUR/USD Investing: Euro Weakens on Disappointing Data

The EUR/USD currency pair experienced a recent downtrend after missing the bullish signal from the previous analysis on 12th July. Simultaneously, the bullish price action occurred slightly below the identified support level at $1.1026. The current analysis for EUR/USD investing signals a risk percentage of 0.75% for potential trades today. It may only appear between 8 a.m. and 5 p.m. London time.

For shorter trading sessions, investors may consider going short. Placing the stop loss 1 pip above the local swing high and moving it to break even after 20 pips in profit are essential risk management measures. Profits can be taken off the table when the price reaches 50 pips in profit, leaving the remaining position to ride.

Alternatively, for the longer ones, going long could be a more effective option. Traders should set the stop loss 1 pip below the local swing low, move it to break even after 20 pips in profit and take 50% of the position as profit when the price reaches 20 pips in profit, allowing the rest to remain.

A classic “price action reversal” can be identified by closely observing hourly candle patterns like pin bars, outside bars, or engulfing candles with higher closes. Exploiting these levels or zones by observing price action can help inform trading decisions.

Best Time to Trade EUR/USD Analysis

The previous analysis on 12th July pointed towards a potential bullish bounce at a support level following the CPI data release. This prediction held true, as the dovish surprise in the US CPI resulted in a sharp sell-off of the US Dollar, propelling the currency pair higher.

However, the price faced resistance after breaking out to new multi-month highs above $1.1250, leading to a solid bearish reversal. The drop accelerated with disappointing Eurozone economic data, making the 100 Euro to Dollar the weakest major rate.

Technically, the drop below the former support level at $1.1089 signals a bearish trend. However, the price is attempting to move back above this level. Yet, resistance remains strong up to $1.1125 and beyond.

The most viable opportunity today could be a potential short trade from two consecutive lower hourly close sessions. Traders taking short positions in this area should consider taking profits of around $1.1025. At that point, initial support shows up as the price approaches the significant round number at $1.1000.

Regarding the USD, there will be a release of Manufacturing & Services PMI data at 2:45 pm London time. Meanwhile, there are no high-importance releases today concerning the EUR/USD investing.