Is the EUR/USD poised for a breakout, or are we in for more sideways action? That's the million-dollar question facing forex traders today, and Adam Lemon, DailyForex's Chief Analyst, is here to shed some light. But here's where it gets interesting: while the technical picture seems clearer than last week, a crucial level at $1.1887 could be the make-or-break point. Will it act as a springboard for a bullish rally, or will it prove to be a stubborn resistance?
Adam's previous EUR/USD signal from February 5th (https://www.dailyforex.com/forex-technical-analysis/2026/02/eurusd-forex-signal-05-february-2026/240827) didn't trigger, but today's analysis presents new opportunities. He recommends a cautious approach, suggesting a maximum risk of 0.75% per trade and emphasizing that trades should be executed before 5 PM London time.
Short Trade Strategy:
- Look for a bearish reversal on the hourly chart (H1) when the price touches $1.1887, $1.1949, or $1.1975. Think pin bars, dojis, or engulfing candles with a lower close – these are your classic reversal signals (https://www.dailyforex.com/forex-articles/2012/03/understanding-the-pin-bar/11422).
- Place a tight stop loss just above the recent swing high to limit potential losses.
- Once the trade moves 20 pips in your favor, move the stop loss to break even, locking in some profit.
- Take 50% of your profit at 20 pips and let the remaining position run, potentially capturing further gains.
Long Trade Strategy:
- Conversely, watch for a bullish reversal on the H1 chart when the price reaches $1.1833, $1.1806, or $1.1766. Again, look for those telltale reversal patterns (https://www.dailyforex.com/forex-articles/2013/06/price-action-storytelling/21830).
- Place a stop loss just below the recent swing low.
- Implement the same risk management strategy as the short trade: move stop loss to break even at 20 pips profit, take 50% profit, and let the rest ride.
Technical Analysis Deep Dive:
Adam's analysis from a week ago (https://www.dailyforex.com/forex-technical-analysis/eur-usd-forecast/page-1) predicted choppy price action, which materialized, but the anticipated dip to $1.1672 never occurred. Now, the picture is more defined. Yesterday's strong US jobs and earnings data bolstered the US Dollar, pushing the EUR/USD below the former support at $1.1887. However, the pair found support at $1.1833 and is forming a potential bullish 'square root' pattern with a double bottom around $1.1850. This suggests a potential upward move, but only if the price can decisively break above the pivotal $1.1887 level. Adam will be watching for two consecutive hourly closes above this level without significant upper wicks as a confirmation signal for a long position targeting $1.1949.
About Adam Lemon:
Adam Lemon, DailyForex's Chief Analyst since 2013, is a seasoned trader with over 12 years of experience in financial markets, including a 6-year stint at Merrill Lynch. He believes retail traders can achieve long-term success by managing risk, following trends, and weathering short-term setbacks, provided they use reputable brokers. Adam actively trades Forex, stocks, and other instruments in his own account, bringing real-world experience to his analysis.
What's your take on the EUR/USD's next move? Will $1.1887 prove to be a turning point, or will the sideways trend continue? Share your thoughts in the comments below!
