By Marco Mayer on Tuesday, 03 May 2016
Category: Trading General

EUR/USD Update

The last I did a post about what's going on in EUR/USD and that it's unlikely we'll see a significant move unless the pair breaks out of it's established range. Now that finally happened and the Euro is on a strong run for a few days now already.

Now what to do? If you're already long, should you keep on holding the position? If you're not in the trade already, should you still buy at the market? Or wait for a pullback and then get in? Or sell because it's overbought?

For each of these possibilities I could easily come up with a few plausible sounding reasons to back up each idea. And it's one of the reasons why I'm happy to trade in a systematic way. Is there a setup in the market? If so I know where and how to get into the trade and once I'm in, how to get out. No need to contemplate each of the options you have all the time as a trader. That gives you a tremendous amount of freedom, all you have to do is follow your plan. Without one, you're lost. And the more experienced you are as a trader, the more lost you'll be. Because you'll gain more and more knowledge about the markets and learn all kinds of different views to take. What when you started out as a trader was a clear buy-signal on the chart you're looking at, now you see from all kinds of different perspectives. So at the end you have to simplify things again, otherwise you'll end up paralyzed, unable to pull the trigger.

Now just looking at that breakout, here's my guess on the market on a short term 2-3 days perspective. I wouldn't get in right now for a short-term position. Instead I'd wait for a pullback back to 1.1400 - 1.1450. Should prices go back down and close below 1.1340 that idea would have failed and I'd consider EUR/USD to be back in it's previous range. Regarding the upside, there's strong resistance around 1.1700, so that might be the short-term upside.

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