Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
US Dollar Gold Trend Analysis - 15th June 19
Gold Stocks “Launch” is in Line With Fundamentals - 15th June 19
The Rise of Silver and Major Economic Decline - 15th June 19
Fire Insurance Claims: What Are the Things a Fire Claim Adjuster Does? - 15th June 19
How To Find A Trustworthy Casino? - 15th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match - Video - 14th June 19
Gold and Silver, Precious Metals: T-Minus 3 Seconds To Liftoff! - 14th June 19
Silver Investing Trend Analysis - Video - 14th June 19
The American Dream Is Alive and Well - in China - 14th June 19
Keeping the Online Gaming Industry in Line - 14th June 19
How Acquisitions Affect Global Stocks - 14th June 19
Please Don’t Buy the Dip in Nvidia or Other Chip Stocks - 14th June 19
A Big Thing in Investor Education is Explainer Videos - 14th June 19
IRAN - The Next American War - 13th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match Contest - 13th June 19
Top Best VPN Services You Can Choose For Your iPhone - 13th June 19
Tory Leadership Contest Betting Markets Forecast - Betfair - 13th June 19
US Stock Market Setting Up A Pennant Formation - 13th June 19
Which Stocks Will Lead The Cannabis Rebound? - 13th June 19
The Privatization of US Indo-Pacific Vision - Project 2049, Armitage, Budget Ploys and Taiwan Nexus - 12th June 19
Gold Price Breaks to the Upside - 12th June 19
Top Publicly Traded Casino Company Stocks for 2019 - 12th June 19
Silver Investing Trend Analysis - 12th June 19
Why Blue-Chip Dividend Stocks Aren’t as Safe as You Think - 12th June 19
Technical Analysis Shows Aug/Sept Stock Market Top Pattern Should Form - 12th June 19
FTSE 100: A Top European Index - 12th June 19
Gold Surprise! - 11th June 19
How Forex Indicators are Getting Even More Attention in the Market? - 11th June 19
Stock Market Storm Clouds on the Horizon - 11th June 19
Is Your Financial Security Based On A Double Aberration? - 11th June 19
What If Stocks Are Wrong About Interest Rate Cuts? - 11th June 19
US House Prices Yield Curve, Debt, QE4EVER! - 11th June 19
Natural Gas Moves Into Basing Zone - 11th June 19
U.S. Dollar Stall is Good for Commodities - 11th June 19
Fed Running Out of Time and Conventional Weapons - 11th June 19
Trade Wars Propelling Stock Markets to New Highs - 11th June 19
Best Travel Bags for Summer Holidays 2019, Back Sling packs, water proof, money belt, tactical - 11th June 19
Betting on Next British Prime Minister Tory Leadership Betfair Markets Forecast - 10th June 19
How Can Stock Market Go Up When We’re Headed Towards a Recession? - 10th June 19
If You Invest in Dividend Stocks, Do This to Double Your Returns - 10th June 19
Reasons for the Success of the Dating Market - 10th June 19
Gold Price Trend Analysis - Video - 10th June 19
US Stock Markets Rally Hard – Could Another Big Upside Leg Begin? - 10th June 19
Stock Market Huge Cosmic Cluster Ahead: Buckle Up! - 10th June 19
Stock Market Higher To Go? - 10th June 19
The Gold Price Golden Neckline… - 10th June 19
Gold Price Seasonal Trend Analysis - 9th June 19
The Fed Stops Pretending - 9th June 19
Fed Rate Cuts Soon; Bitcoin Enthusiasts Join Wall Street in Bashing Gold - 9th June 19
1990s vs. 2010s - Which Expansion Will be Better for Gold? - 9th June 19
Gold Price Trend Analysis, MACD, Trend Channels, Support / Resistance - 8th June 19
Gold Surges Near Breakout - 8th June 19
Could Gold Rally Above $3750 Before December 2019? - 8th June 19
5 Big Lies About Precious Metals Investing Exposed - 8th June 19
ADL Predictive Modeling Suggests A Big Move In Silver - 7th June 19
US China Trade War Will Start a Recession, or Worse… - 7th June 19
Land Rover Discovery Sport Brake Pads Expected Life, Worn Pads Dash Warning - 7th June 19
The Post Room Selfies Fun at Meadowhall Sheffield, From Game of Thrones to Desert Island... - 7th June 19
SAMSUNG - South Korean Electronics Giant - Investing in AI Stocks - Video - 7th June 19
Gold Price Rally or New Bull Market? - 7th June 19
Digging into the Rising Gold: Trade Tensions, Recessionary Worries and Dovish Fed - 7th June 19
The Risky Stocks Big Lie That Keeps Many Investors Poor - 7th June 19
Gold and HUI Short-term Strength Is a Strong Call to Action - 7th June 19
Fear Drives Stock Market Expectations - 7th June 19 - Chris_Vermeulen
Next British Prime Minister Tory Leadership Betting Markets - 6th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

EURUSD Forex Trading Strategy Simplifies a Choppy Market

Currencies / Euro Jan 31, 2017 - 11:47 AM GMT

By: Nicholas_Kitonyi

Currencies The forex market accounts for trillions worth of transactions on a daily basis, which makes it one of the most liquid markets to participate in. The EUR/USD currency pair accounts for most of those transactions but that does not make the pair immune to the rigorous volatility experienced amongst the exotic currency pairs.

Due to less liquidity, currency markets involving less popular pairs tend to be more volatile than their more popular counterparts. However, as demonstrated in the chart below, the EUR/USD pair, which is one of the most popular currency pairs in the Forex market has been very choppy of late. At least, when you look at it from the perspective of the hourly chart.


Trading in such a market can be very tricky even for the most experienced traders, and that’s why most forex trading experts always advise against trading in a choppy market. It is so difficult to identify the right periods to open and close a trade. Yet, some people still profit when the market seems to be stuck on a sideways movement.

So, how do they do it?

Different traders have their own unique trading strategies. Some tend to beat the market while others fail to net profits on a regular basis. However, one of the best strategies for trading a choppy market as per several forex trading courses involves looking at the market from different angles. It is pretty clear that trading opportunities are never easy to spot in any market, trending or otherwise. Instead, opportunities tend to hide in plain sight.

This is why even when the markets are as choppy as they currently are, there will always be some people making money. To illustrate how they do it, it is ideal to use an example of a currency pair that bears the characteristics of a choppy market. And as noted in this article, the EUR/USD pair is a perfect example. In the chart above, it looks ominous to try and pick a bullish or bearish position. However, when you use the theory of multiple-timeframe charts, the picture begins to form some short-term trends.

For instance, look at the chart below, it’s the 4-hour chart for the EUR/USD pair.

As demonstrated in the 4-hour chart above, there seems to be some short-term breakouts coming after every couple of weeks of a sideways movement. And going by this demonstration, it’s pretty easy to say that the next short-term breakout could be around the corner.

In that case, it gives traders a more visible trading opportunity as compared to using just the hourly chart in the first image of this article. Nonetheless, this does not clear up things completely. Given the current exchange rate of about 1.0666, technical analyses indicate that there is a possibility that the rate could as well fall to 1.0600.

However, if the upward breakout takes places as has been the case over the last two months, then it would be ideal to target to take profits at 1.0800-1.0880. The immediate major resistance zone after the breakout would be within that trading range as demonstrated in the chart above.

So, what should the traders do to confirm whether to open a bullish position on the pair? The simple answer is to expand the time frame by opening the daily chart.

Now, as shown in the daily chart below, the EUR/USD currency pair has been characterized by a series of higher highs and higher lows since the US federal reserve hiked interest rates in December. While this seems awkward under normal circumstances, it seems that US President Donald Trump has been doing his bit to drive volatility in the market, which has for some reason gone against the USD.

The daily chart above shows that the EUR/USD pair just hit a potential rebound zone after the most recent pullback.

The general outlook seems to point towards a continuation of an upward trending movement, and as demonstrated in the chart, if the rebound takes place it could rally the EUR/USD pair to 1.0860 level, which again is within the initial take profit zone suggested by the 4-hour chart.

So, does that make the trade worth taking or should traders expand the horizon further? Let’s look at the weekly chart to see if the picture remains the same.

In the first three charts, the bullish movement was created within the short-term breakouts and rebounds in a generally upward trending marker. However, the picture changes slightly when we expand the horizon further to the weekly and monthly charts.



In the weekly chart above, the EUR/USD currency pair has been on a sideways movement since the year 2015. There have been a series of pullbacks and rebounds within a well-established support and resistance zone. And at the moment, the market seems to be on the rebound moving upwards towards the 1.085 level and potentially to the 1.1134 zone.

The monthly chart also seems to confirm this movement albeit in more squeezed version. The EUR/USD pair is currently trading within a bullish candle, which confirms the upward looking rebound in the weekly chart.

Therefore, this confirms the potentially bullish position that exists in the EUR/USD currency pair, both in the short-term and the long-term trading horizons, of course barring other market moving events tinkering the market.

Conclusion

In summary, trading a choppy forex market can be very tricky for all traders. However, as demonstrated in the example above, we can always look at it from different timeframes to spot opportunities that hide in plain sight.

The EUR/USD pair looks set for a bullish opportunity, but then again, a major news event could change everything.

By Nicholas Kitonyi

Copyright © 2017 Nicholas Kitonyi - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules