EURGBP and GBPJPY Trade Ideas
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.
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:
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.
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:
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:
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
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