With yesterday's signal we did see a break of rising trend support but follow through was weak, and now the pair is treating that former support as resistance as it scrapes along its underside.
Daily Outlook: We do have some good setups to watch for today with the EUR/USD. To recap my trend positions - I'm short-term (30m, 60m) mixed, medium-term (4h) bullish and long-term (daily+) bearish. We do have a bunch of news coming out tomorrow (check the forex calendar for details) that will hopefully give some much needed wind to our EUR/USD sails and get this pair trending again.
Until then take a look at this possible head and shoulders forming on the 4-hour charts. As you can see a right shoulder still needs to form to complete the pattern, but a short right shoulder on a head and shoulders pattern is still a high probability bearish signal. I will be looking for two potential trades: a failure near the right shoulder top (1.2650-1.2670) and a bearish break below the neckline 1.2550 for shorting opps.
Trading Idea: I will start off with the most conservative trade first: long from the very distant 1.2350 (rising trend support from 4-h and daily charts, thick orange line on my chart). From here we could easily target 1.2450 and 1.2600 for 250 pips profit and get some great risk/reward doing it. I very much doubt we will hit this level today.
The secondary trade, a bit more risky, is to short on a sustained break below the neckline (1.2550) with short targets at 1.2525, 1.2500, 1.2470 and 1.2440 for 110 pips profit.
Finally the most aggressive setup (read: more risk) is a short on a failure of 1.2650-1.2670 resistance zone (top of potential right shoulder) targeting the neckline at 1.2550 for 100+ pips profit.
Enjoy the setups today and happy pipping!