There is a narrowing triangle chart pattern forming.

My previous EUR/USD signal yesterday was not triggered as there was no bearish price action when the price first reached the resistance level which I had identified at $1.0710.

Today’s EUR/USD Signals

Risk 0.75%.

Trades must be taken before 5pm London time today only.

• Short entry following a bearish price action reversal on the H1 timeframe immediately upon the next touch of the descending trend line shown within the price chart below, or $1.0824.
• 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 Ideas

• Long entry following a bullish price action reversal on the H1 timeframe immediately upon the next touch of $1.0711, $1.0631, or $1.0600.
• 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.

EUR/USD Analysis

I wrote yesterday that it would probably be quite dangerous to do anything else here over the day except for look for a short trade from a bearish reversal from $1.0710. I thought it would be wiser to trade other currency pairs such as the USD/JPY.

This was a good call as the price moved little over the day.

We now await the European Central Bank’s crucial data and policy statements due later today, which is highly likely to produce some volatility in this pair and possible a more definite directional move.

The technical picture sees the price consolidating within a narrowing triangle chart pattern. It is worth keeping in mind that the first breakout after the ECB release will not necessarily be the decisive one, and that the long-term trend is still bearish.

Much will probably be determined by what the ECB hints about its next move on a rate hike – one is not expected today.

Regarding the EUR, the European Central Bank will be releasing it Main Refinancing Rate and Monetary Policy Statement at 12:45pm London time, followed 45 minutes later by the usual press conference. There is nothing of high importance due today concerning the USD.

 

At this point, if you are a longer-term investor, a dip might offer a chance to build a position, but that is about as aggressive as I get.

Monero has gone back and forth during the trading session on Wednesday as we await the FOMC statement. True, Monero itself is not necessarily driven by the FOMC statement and the Federal Reserve monetary policy, but markets, in general, are paying attention to what the Federal Reserve is going to do because it has a lot to do with what the liquidity situation will be. Remember, Monero is pretty far out on the risk spectrum, as is most crypto.

At this point, Bitcoin does look like it is trying to stabilize so that might help other smaller coins such as Monero, but it is also worth knowing that Monero is sitting just below the 50 Day EMA, as well as the 200 Day EMA. Furthermore, it looks as if there is a lot of resistance near the $235 level just above there. Underneath, the $200 level has offered a little bit of support, but quite frankly I think that is more or less going to be of the psychological variety. A lot of what happens next will come down to risk appetite in markets overall and unfortunately will probably have very little to do with Monero itself.

A breakdown below the $200 level opens up the $180 level for a target, which has been both support and resistance a couple of times in the past. After that, Monero could find itself falling all the way down to the $150 level. This will probably be a result of Bitcoin and Ethereum both falling, which tend to drag the rest of the market down with it when it has a rough patch. A very tight and hawkish Federal Reserve will almost certainly have that effect on crypto because it would have money running towards the US dollar even further than it has previously. If that is the case, crypto in general will get crushed, and the smaller coins will take the brunt of the damage.

On the other hand, if Jerome Powell does start to walk back some of the hawkish behavior, then it is possible that the markets may start to look to altcoins such as Monero, but I think that would probably be jumping the gun. We need to see Bitcoin break significantly above $40,000 before that is a real possibility. At this point, if you are a longer-term investor, a dip might offer a chance to build a position, but that is about as aggressive as I get.