Is it time to trade the EURUSD?

Euro Flag

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:

EURUSD

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:

EURUSD

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.

Please comment.

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Raul Lopez

I've been trading the markets for more than 15 years. I believe the best way to trade is by adapting to the market conditions. You can learn it too, join our community .

  • Chad Hogan

    Im well thanks and you? Yes Im still waiting on AUDCHF to form a range. Its difficult to enter when price doesnt range dont you think. Im looking at EURGBP, EURCAD, GBPAUD and CHFJPY. Ive shorted the AUDNZD at the top of the range on price action. The news this week will make trading that bit harder I think.

    • Raul Lopez

      EURCAD already formed a range, so a breakout signal could be good here…

      And yes, I agree with you that fundamental announcements will make this week a bit harder, but it will keep it moving which is also good for us :)

      Good luck Chad!

  • Chad Hogan

    Oh and AUDCHF. Plenty of pips on offer.

    • Raul Lopez

      Yep, the AUDCHF has plenty of pips to offer… Still waiting for a retracement or a small range… maybe the 15m chart could give us an earlier signal…

      How is everything Chad?

  • Chad Hogan

    Hey Raul,
    im not interested in the EURUSD at the moment, I agree that there are other pairs showing much more potential. I closed my GBPUSD trade at break even after gaining around 100 pips. i hung on for too long.. Now Im looking at the GBPAUD short, GBPCHF long, and EURGBP short. I also think Apostolis could be correct on the EURCAD. That daily pinbar on support might see price retest resistance @ 1.52800. The only thing I dont like is the weekly candle. Still looking bearish.

    • Raul Lopez

      the GBPUSD dropped like a rock… it was too fast I think, so I guess it was ok.

      Are you still monitoring the same pairs this week?

      Cheers,

  • Ofer

    Well, considering the ECB recent statements I wouldn’t go long until June, when we will find out if the ECB is just talking the talk or walking the walk.
    Anyway, I don’t see the Euro crosses the 1.4 until June, and then it can either rise to even 1.5 or dive toward 1.25-1.3.

    I am trading the Euro pretty successfully by selling the short term highs. I wouldn’t go long for that one until June, although it’s obvious that it will rise a few more times until June.

    My current strategy is to hedge the Pound (long) and the Euro (Short), without SL. UK’s economy is strong and the only thing that pulls the Pound down is the Euro. So hedging these two like I said, seems to me like the safest way to go for around 50-100 pips run per trade.

    What do you think Raul?

    • Raul Lopez

      Hey Ofer, long time no see…

      Could be a good idea, but I’ll just wait until I see a clearer picture of on both of them…

      There are other currency pairs with clearer swings and S&R levels where the risk is worth it, right now, I dont think the EURUSD is one of them…

      Do you trade other currency pairs or crosses?

      Good luck!

  • APOSTOLIS

    I believe EURCAD can be a nice buy for the next week!!:)

    • Raul Lopez

      You know Apostolis, you could be right, I’ll take a look at it and let you know what I think about it…

  • Tania

    Hi Raul, I went short on euraud currently up 44pips, there is minor support around 1.46524 so will watch it around there, if it makes it…:)

    • Raul Lopez

      Hey Tania… 1.4652??? Is this the EURUSD you are talking about?

      • Tania

        EURAUD I went short on, my trade hit tp today for 223 pips :)

        • Raul Lopez

          Wow Tania!!! Congrats… great trade!

          What other pairs are you currently monitoring?

  • Waqas Khan

    any article on SSI ?

    • Raul Lopez

      Hey Waqas, whats SSI?

  • Waqas Khan

    what do you think about the SSI ? currently it is -5.51 on EU which good enough to go long on support