Although the EUR/USD is the most commonly traded pair, I can show you other important ways to trade in the Euro safely despite the on going drama in Europe.
The first thing that I am concerned about most in every market I wish to trade is the psychology on its daily chart. To me, this step is more or less the same as dealing with the question: What direction is the 34EMA Wave taking on a daily time frame? This is what is simply known as searching for a directional bias in trending. Any action on the daily time frame signifies a prevailing psychology on the market.
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In case of an uptrend, it is more likely that there will be more buyer support ahead of pullbacks and prospective momentum aiming to take the market higher. The opposite of this is that you will have selling resistance on rebounds and disappointing momentum pushing the market down.
I am more interested in pairs that come with movement directional bias. Choppy markets that are normally bound by range can easily kill your account. The interesting thing about the current news on Europe is that they will attract more traders to trade in the EUR/USD pair, although it is not yet clear what sideways range is there on this daily. My stand is that the Euro can only attract more attention if it placed through EUR/JPY or EUR/GBP and not the EUR/USD pair. Let’s examine three of them and find out why.
The EUR/USD pair has created an interesting gap that continues to attract more attention to price.
The daily time frame for the EUR/USD is still in a uneven and although downtrend has attracted more attention less follow-through has forced the overall bearish psychology to lose dominance on price movement.
The gap created by EUR/USD has not yet been filled making the black hole a vacuum for cost action. It is also clear that the current gravitational pull has the capacity to pull prices up before it exhausts back into range lows of the sideways cut. However, whether the pull will be considered as a short-term resistance regardless of whether it has a gap or not.
It is also important to look at pair that relate back to the Euro despite having a movement directional bias.
It is certain that the EUR/JPY is not any clearer with regards to a trend of which EUR/USD has began to indicate signs of a new transition. 200DMA also plays a major role in establishing an important level of short-term resistance has undergone the necessary test.
EUR/JPY pair is already tending lower and has broken the 200DMA support. This means that both the 200DMA and the gap that had been created have been closed causing a stacked resistance position overhead.
You can also trade the Euro by pitting it next to the pound.
EUR/GBP is capitalizing on the strength and the Euro’s range. In case the Euro creates a break resistance and drops, the chart will trend lower.