If you’re having trouble picking fiat forex pairs, then maybe you can get clues from the U.S. dollar index’s trend.
Not feelin’ like trading fiat currencies?
I still got yo back with a Bitcoin (BTC/USD) setup!
BTC/USD: 4-hour
BTC/USD 4-hour Forex Chart
Bitcoin (BTC/USD) has been trading between 18,500 and 20,400 after seeing a sharp downswing in August.
The odds currently favor the bears as BTC hovers near the weeks-long resistance.Even Stochastic is on the bears’ side with an overbought signal on the 4-hour time frame.
Will the range hold for another day?
Shorting at current levels would yield the best risk ratio if you believe that BTC/USD will soon be on its way to the 19,600 mid-range or 18,500 range support levels.
If you think that BTC/USD is ready for a longer-term trend reversal, then you can also wait for a clear break above the identified range and then scale in as BTC breaks the potential inflection points above the pattern.
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U.S. Dollar Index (DXY): 4-hour
US Dollar Index (DXY) 4-hour Forex Chart
Can’t decide which dollar pair to trade this week?
You can take cues from the U.S. dollar index, which is currently finding support from the 61.8% Fibonacci retracement of September’s downswing, a previous resistance zone, and the 200 SMA on the 4-hour time frame.Dollar bulls who are confident that the Greenback will soon regain its mojo can buy at current levels.
Meanwhile, more conservative traders can also wait for a pullback to a months-long trend line resistance for a better R:R.
Watch how DXY reacts to the 200 SMA and trend line support zones! Strong momentum below the areas could lead to a longer-term reversal that could present good risk ratios.
