Why are Euro pairs being so difficult to trade?

Posted Wednesday, July 8, 2015 by
Skerdian Meta • 2 min read

Several reasons are behind the difficulty in trading the Euro these days.
It was so easy to trade the Euro from last summer until March this year, particularly against the USD. All you had to do is wait for a retrace and then sell the hell out of it. You just couldn´t be wrong selling the Euro and it was easy money. But this all changed in March and there are several reasons. The US economic recovery is not as strong as it was last year and the outlook for future interest rate hikes is not as clear. The market had been expecting the ECB QE programme, which set a negative sentiment on the Euro for about a year, but that´s out of the way now. Europe has moved away from a possible deflation and the European economy has slightly improved… or at least got out of that downward spiral. On the other side, the drama with Greece has intensified and is adding more volatility to this fragile market. 

All of the above reasons have made it much more difficult to trade. It would be easy if everything reversed and the Euro started an uptrend; we would buy the Euro dips. But nothing is clear right now and therefore volatility is high in both directions. We said in the market update yesterday that the Euro was finally making some reasonable moves because it was declining as the Greek situation worsened. But by the end of the day it reversed all the losses, making a 150 pip round-trip. What can you make of it as a trader and how can you trade such sudden movements? Well, my thought is that you don´t stick to a position too long in such markets. If you´re in some profit, take it and run with – there will always be other opportunities to make some more profit. It worked well for us yesterday with two of our EUR/USD sell signals. So that´s what we´re going to do today, we will sell the weakest pairs and close the trades for a reasonable profit. We already sold AUD/USD and will sell GBP/USD if it makes a pullback since these two pairs are the weakest link.

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