Hey trader, what do you think about the market this week so far?
Some crosses are still trading in undefined ranges, without clear S&R levels, no clear wings, etc.
But little by little, each one of them are getting out of that consolidation period that made it very difficult to trade.
And here is one example.
The EURGBP just broke through an important support
The EURGBP was trading in a difficult range to trade I would say… But it looks like its getting our of that range. Here is the daily chart:
So it looks like the EURGBP will continue to move down until it reaches its next LT support level around 0.7962
So I think we should start looking for short opportunities in the EURGBP.
Now, should you open your trade right now?
Not so fast, we need to see what’s going on on the short term charts first…
Here is the 30 minute chart:
I need look for clear S&R levels in the ST chart in order to find possible entry levels, and as you can see in the chart above, we’ve got clear resistance and that would be our first possibility, to wait for a retracement to that level (0.8167).
The other trading scenario would be to wait for a second rejection of the lower extreme and then wait for a breakout.
Now, the EURGBP is currently trading 180 pips away from its next LT support level, and you’ve got to remember two things:
- The EURGBP doesn’t move that much, you could easily take a trade here with a 20 pip SL, so there will be enough risk/reward ratio in a trade here
- The pip value in the EURGBP is larger than in most currency pairs, right now each pip is valued at $16.83 (trading 100,000 units).
Which scenario do you favor?
Do you agree with me that the EURGBP is one of the currency pairs with the clearest market condition?
What other pairs are you currently watching?