EURGBP and GBPJPY Trade Ideas

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Hey trader, how is the market behaving lately?

Its been quite slow hasn’t it? In most currency pairs it has been ranging and most of the time, in a not well defined range, making it very difficult to trade.

Take a look at the EURUSD, its been like that, its been ranging since the last week of January, with only one major quick move (fundamentally driven by the way)… but other than that, its been slow, not well defined, etc.

I wonder how traders that only trade the EURUSD are doing… probably not very well…

That’s one of the reasons why you shouldn’t trade only one or two currency pairs. You need to find the ones that have the clearest conditions, and focus on those.

What if there are no clear currency pairs? In that unlikely event, you can focus on other markets, maybe try gold (XAUUSD), other commodities, maybe indices or the most traded stocks, if you dont have access to an stock broker, you can trade CFD’s, what about futures?

We have plenty of options, so please make sure to trade and focus in the instruments that have the clearest conditions of them all.

Ok, these two are a few currency pairs that I think have a clear condition.

EURGBP Analysis

Its been a while since I’ve been talking about the bearish condition of the EURGBP, but its still bearish, and as long as have enough room to get a good risk reward ratio, we can keep looking for short opportunities.

Let me show you the long term chart:

EURGBP Weekly

Its not that you are going to trade based on the above chart, I use the long term charts to determine whether the market is trading in a clear market condition or not.

If I see clear levels, clear swings then I trade it, I go to the short term chart and look for my entries.

And that’s exactly what I’m going to do with the EURGBP, look for a short signal in the short term charts.

Now, it doesn’t matter what kind of system you use, you can use: technical indicators, Fibonacci, price action, Bollinger bands, or whatever you like to use, just make sure to trade only in the direction of the market condition (bearish in this case).

Now, there are a few things that you should know about the EURGBP:

  • It doesn’t move that fast, so the SL and TP orders are usually pretty tight.
  • The value per pip is higher than most pairs, right now its around $15 per pip.

Ok, so go ahead an use whatever system you are using to fin a short opportunity in the EURGBP.

GBPJPY analysis

Another currency pair that I’m closely monitoring is the GBPJPY.

I remember a few years ago the GBPJPY was the currency pair that moved the most. Right now it still moves pretty fast, but there are others that move faster than this one, still, its pretty fast…

Well, the fact that its fast is not always that good, specially when it moves against you, you could get stopped out in a matter of seconds… but when it moves on your favor, LOL… O love that feeling!

In the last few days it has been ranging though, but sooner or later it will move.

Here is the LT chart:

GBPJPY Daily

As you can see, it was rejected from the LT support level, and now it is likely to continue its way up until it reaches the next LT level at 189.11

It is currently trading at 183.92, so we’ve got plenty of room before we hit the next LT level, we are talking about more than 500 pips, so go figure.

Now, here is the short term chart:

GBPJPY Hourly

We have two possibilities here:

Take a retracement signal: the GBPJPY needs to retrace back to the bottom of the short term range, and form significant upward pressure (read my previous article about retracement signals if you dont understand the terms).

Take a breakout signal: In this case, we can place our orders like this:

Entry stop order: 185.20
SL: 184.60
TP: 188.65

Your turn

What do you think about these two currency pairs? Are you going to trade them?

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 .

  • Tradman

    Hi Raul, are you still bullish on this pair given the lower highs it’s been making on the daily since 08 Dec 2012?

    Tim

    • Raul Lopez

      Hey Tim,

      You are talking about the GBPJPY right? It might be just a small retracement, just like the one we’ve got on its way down… Sometimes we these retracements are larger than we would expect them to be… but hey, that’s the market…

      Now, the fact that it is trading in a bullish condition it doesnt meant that I’m actively looking for long opportunities in the GBPJPY right now… but if you take look at the 1H chart, you’ll see a clear range (at least the support level its clear) and we might have an opportunity to go long from there…

      Now, about the EURGBP, its still bearish!

      Good luck Tim!

      • Tradman

        Well I’m long now from 182.31 so lets see where the next few days take it. Hopefully to 188.30/40 area. As for the EURGBP I’m waiting for a pullback to go short. Thanks Raul!

        • Raul Lopez

          Good luck with your trade Tim! You’ve got a great trade there… I think it will reach at least the upper extreme of the short term range.

          Keep me posted!

  • Manish Patel

    Thanks for posting best analysis.
    How you calculate Stoploss?

    • Raul Lopez

      Hello Manish,

      In the last two weeks I shared my complete strategy, please look for the articles related to the breakout and retracement entries… you’ll find all the details there.

      Good luck!

  • hira

    i will eventually try to short as moves take time to develop i call these markets exploit zones where they gather buyers and seller / support and resistance and there usually is a false break first depending on the signal and location i will take the first or the second … and have a big stop so its like im hiding above a lot of orders so im harder to reach …

    • hira

      when a signal occurs i don’t hesitate …

      • Raul Lopez

        That’s the way to go, just follow your system and pips will flow in!

    • Raul Lopez

      Nice Analysis Hira!