Is it time to trade the EURUSD?
You know trader, it might! (pretty soon).
It’s been difficult to trade the EURUSD mostly because on its long term charts we dont have clear S&R levels, clear swings, etc.
If we dont have clear S&R levels and swings, we dont know when the market is going to stop, retrace back or change direction.
So yes, it has been difficult to see those levels on the daily charts, but things change when you look at the weekly chart… Let me show you what I’m talking about:
As you can see, in this chart the EURUSD is trading in a pretty large range, from 1.4877 to 1.2128, around 2,500 pip range…
Now, it’s not that we are going to trade the whole range, it would take more than a year to go from one extreme to the other (see the previous swings), but at least it gives us an idea of where it is likely to move.
Now, when it comes to the daily chart it’s a little more complicated, first let me show you the chart:
You might say, it’s kind of easy, it’s clearly moving up…. And yes, I agree with that statement, but that fact that it has been moving up is very different than being able to profit from those movements.
You see, in order trade any instrument and really have the odds in your favor, you need to be able to answer three questions:
- What is the market doing right now
- What is the market likely to do
- Where is it likely to stop
So you know what the EURUSD is doing right now (it’s moving up), but since you dont have clear S&R levels, you dont have an answer to the second and the third questions…
And that makes my point… right now, I wouldn’t trade the EURUSD.
Now, I’m not saying that you should never trade the EURUSD. Right now I dont feel comfortable trading it, mostly because it doesn’t have clear S&R levels, but that could change in the near future.
You see, it is pretty close to the previous high (around 1.3965), right now it looks like its being rejected from that level, however if it comes back and breaks through this level, things might change and long opportunities might be in play.
I’m pretty sure though that there are other currency pairs with clearer market conditions…
And that’s what I want to challenge you: What other currency pairs you think are clearer than the EURUSD? And by clearer I mean, something that you would trade.