As you already know, I like to trade the currency pairs that have a clear condition on both, long term and short term charts.
This way we can determine:
- ST and LT support and resistance levels
- Market swings
And once we have that information, we can do wonderful things with the market.
When you’ve got clear S&R levels plus clear swings you know what the market is doing, and when you know what the market is doing, is quite easy to determine what the market is likely to do.
In order to get to that point you need to do both, a LT and a ST analysis… just like this one:
GBPAUD Long Term Analysis
Here is the long term chart:
Right now the GBPAUD is trading near a LT level, that means that we still dont know whether the market is going to break that resistance level up or get rejected from that level and continue its way down.
The good thing about this is that WE DONT NEED TO KNOW.
We can look at the short term charts to determine the levels that the market needs to break so we can start looking for trade opportunities.
GBPAUD Short term analysis
Here is the short term chart:
The good thing about the GBPAUD is that it’s got clear S&R levels in the short term charts… and because of this we can create a complete trading plan.
- If the GBPAUD breaks above the ST resistance level (1.8344) I’ll start looking for long opportunities.
- If the GBPAUD breaks below the ST support level (1.8106) I’ll start looking for short opportunities.
It looks like we are getting the second rejection of the resistance level, we’ll have to confirma that!
What do you think about my analysis? Are you going to trade the GBPAUD?
What other currency pairs are you monitoring?
Share your thoughts!