Possible 500 pip trade in the EURUSD

Euro Flag

You know that before taking a trade I like to do a complete analysis of both, the long term and the short term charts.

I do this to make sure that both, long and short term charts are pointing in the same direction, therefore the likelihood of my trade moving in the intended direction increases.

But there is another reason of why I like to do this…

I while back I was reading an article about Warren Buffet and how he thought about risk… He said something about risk that became part of the way I see the market right now:

“Risk comes from not knowing what you are doing”

You know something, he is dead right about it!

From that moment, I understood that it is very important to try to understand what the market is doing right now.

Once you understand what the market is doing right now, you also know what the market is likely to do, and having that information could be the difference between a profitable trader and a trader with negative results.

What do you think?

Anyways… here is why I think there is a possible 500 pip trade in the EURUSD.

EURUSD Long Term Analysis

The EURUSD is currently trading near a LT level, that means that we still dont know which way its heading…

EURUSD 1D

But there are two possible scenarios:

  1. The market gets rejected from this level and retraces back to the next resistance level (1.3507).
  2. The market breaks through this level and continues its way down until it hits the next support level at 1.2800.

So if the second scenario unfolds, we’ll get a 500 pip ride to the next LT level.

Now, how when should we start looking for trade opportunities here?

We need to analyze the short term charts for that…

EURUSD Short Term Analysis

Here is the short term range:

EURUSD 1H

  • If the EURUSD breaks the upper resistance level, the first scenario ir likely to complete.
  • If the EURUSD breaks the lower support level, the second scenario is likely to unfold.

I hope is the latter one…

Your turn

Are you currently trading the EURUSD?

What do you think about my trading plan?

What other currency pairs are you trading?

Share your thoughts

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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 .

  • Eric Aroh

    Hi Nial,

    This is another good trade, and I am already in it. My entry point showed a LT downtrend, but trade is currently in the negative – I will exercise patience until the trade truly swings in my favor, whilst sticking to my Stop Loss.

    I just entered the NZDUSD trade (today) going LONG.

    These are the reasons:
    * LT trend is upwards.
    ** The pair has completed (?) its retracement after bouncing off a key (psychological) LT S&R @ 0.8400, with a pin-bar; price action is currently bullish.
    *** Expected pip run is circa 350 pips.

    My current trading is in the green.

    What do you think about this pair?
    Thanks.

    • Raul Lopez

      Hello Eric,

      As I said on the article, we need to wait for the EURUSD to break the lower support level to start looking for trade opportunities… its not safe right now to go short…

      About the NZDUSD, it is still trading around an important level, so I’m still waiting for a breakout before taking a trade there.

      Good luck!

  • Eviano

    The USDCAD is in a very clear bearish condition. A break out just
    occurred this morning. 260 for grabs. there will be a little retracement
    to 1.0911 before heading to 1.0652

    • Raul Lopez

      Hello Eviano, it’s bouncing back… We might need to adjust our support level to 1.0887. We’ll see…

  • Eviano

    The USDCAD is in a very clear bearish condition. A break out just occurred this morning. 260 for grabs. there will be a little retracement to 1.0911 before heading to 1.0652

    • Raul Lopez

      See my reply above…

  • Pipsoholic

    Hi Bro Raul,

    Seem that EURUSD is signalling a very good trade for the next few weeks. I love price action analysis. IMHO, it will make a u-turn for correction before going downward. I’ll be looking for reversal candle at H1 or H4 for the next 24 hours. Target profit at 1.3510-1.3530.

    • Raul Lopez

      Good luck Pipsoholic…

      If you are going to trade the EURUSD, I’d recommend you to wait for it to break either side of the range… As pointed in the article above.

      I dont know what its likely to happen, I know that if it breaks the lower extreme I’ll look for short opportunities and it if breaks the upper extreme of the range I’ll look for long opportunities.

      Thank you for your comment!

  • Said

    Hi Raul,
    I think the EURUSD will trade the next days in range between the two arrows. a breakout would likely be to the lower side however not clear yet.
    EURJPY or USDJPY seems to be clear than EURUSD..

    • Raul Lopez

      Hey Said, Where is your crystal ball? hehehehe How do you know it will range for exactly two days??? hehehhe I’m kidding…

      There is now way of knowing that, from my point of view, I’m just waiting for the EURUSD to break the lower extreme of the range, IF that happens, I’ll try to take advantage of that… But you never know what are the plans of the market…

      I like the USDJPY, but not so much the EURJPY…

      We’ll see what happens!

      I wish you good luck on all your trades Said! And thank you for your comment!

      Cheers,

      • Said

        I would say: You will see how it goes..

        • Raul Lopez

          As Yoda would said… In trading humble be you need to…

          Good luck!

          • Said

            be prepared for the first false break..

          • Raul Lopez

            ??????

  • APOSTOLIS

    lol, hello mate again, once again nice way of thinking, I like that,. My opinion is that the EURUSD will fall lower at the level of 1.3200. This is what I think, At this level I will look for a good retracement back to 1.3500 but only in that case not if it breaks the short term range that you considered. regards

    • Raul Lopez

      Sounds like a good plan Apostolis… For now, I’ll wait for the market to break through the short term support level to start looking for short opportunities…

  • Chad Hogan

    Hi Raul, agreed with the analysis. Ive been following the eurusd for a while now but its swings are volatile hence why Im reluctant to trade it. I wont trade any breakouts, only good price action on a retracement back to support or resistance. We’ll see how it goes..

    • Raul Lopez

      Hey Chad, you are right, swings havent been that clear, but still valid swings… Also, a trade here will be worth it based on the pips before we hit the next level…

      And I’m with you, I wouldnt recommend taking a breakout trade fro that range, I’d wait for a retracement or B/O of the previous low…

      As you say, we’ll see how it goes…