Tuesday November 2, 2021 - 11:18:40 GMT
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Current EURUSD Pattern and How to Trade It
One way of trading the forex markets is to look for patterns in a specific currency and identify a strategy that can be used to take advantage of them. Sometimes there are patterns that repeat themselves. Other times you can take the price moves and come up with a pattern that fits the data. The latter is the type of pattern currently characterizing trading in the EURUSD,
If you go back to September 29, you will find that EURUSD has traded within a 1.15-1.17 (1.1524-1.1693) range for 25 days (26 including today). This period encompasses the entire month of October and has now been extended into the start of November. Over this period, there have been 14 closes below 1.,16 and 11 closes above it.
What does this mean for trading?
Simply put, using a buy/sell and hold strategy (i.e. buy and hold above 1.16 or sell and hold below 1,.15) looking for breakouts has been a losing strategy. This has clearly frustrated trend traders while rewarding those who bet on 1.15-1.17 holding.
While this is easy to identify the current pattern with hindsight, it is worth pointing out given how long nt has been going on. The following video will put the price action in perspective and hints how to trade the current hand we are dealt.
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Jay Meisler, co-founder, Global-View.com
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