Partner Center Find a Broker

If you’re trading euro, it’s not enough to pay attention to just the EUR/USD.

You should also be monitoring the euro against all the other major currencies.

In other words, instead of solely following EUR/USD, you should also follow EUR/JPY, EUR/GBP, EUR/CHF, EUR/AUD, EUR/CAD, and EUR/NZD.

You might be thinking, “Yo Pippo! It’s already a pain to follow one currency pair, and now you want me to follow seven currency pairs?!!!”

Yep. 😁

The easiest and quickest way to do this is to view the EUR Pairs” watchlist on MarketMilk™.

There are different watchlists that are featured on MarketMilk™, but the EUR Pairs” watchlist contains ALL of the seven EUR pairs mentioned.

So let’s take a look at how the euro did yesterday in the forex market…

As you can see above, one euro pair ended higher (EUR/GBP), while the rest ended lower.

If you were just looking at EUR/GBP, you might’ve thought that the euro was strong today.

But as you can from the rest of the euro pairs, it’s pretty evident that, overall, the euro was actually weak today.

And if you were just following EUR/USD, and was actually short, you might’ve been happy buuuuutt if you look closely at the chart…you’d notice that there were other euro pairs that were even more bearish than EUR/USD and you could’ve bagged mo’ pips!

If you’re going to short euro, why not try and short the most bearish euro pair?

How to Find the Most Bearish Currency Pair

While there are probably a gazillion ways to determine the most bearish currency pair out of a group, I’m going to show you one of my favorite methods.

The concept is pretty simple:

  • For a currency pair to be bearish, its trend should be bearish.
  • For the trend to be bearish, the price should be in a downtrend.
  • For the price to be in a downtrend, the price should be BELOW the 200 SMA.
  • The further below the price is from the 200 SMA, the more bearish the currency pair.

So the trick is to measure the distance between the price and its 200 SMA. 

Whichever currency pair has the largest negative distance from its 200 SMA, can be considered the most bearish.

With MarketMilk™, you can do this with ease.

Let’s look at a real example using the “EUR Pairs” watchlist:

EUR Pairs and 200 SMA

In the chart above, you can quickly see that there are four EUR pairs that are currently below their 200 SMAs:

  • EUR/CAD
  • EUR/CHF
  • EUR/JPY
  • EUR/USD

Based on the blue dot, you can see that EUR/JPY has the largest negative distance from its 200 SMA.

How?

Because the blue dot is the farthest to the left. It’s deep in the red zone!

The closer a dot is to the LEFT edge of the chart, the more bearish.

The closer a dot is to the RIGHT edge of the chart, the more bullish.

An easy way is to look at the red and green zones.

The deeper the dot is in the red zone, the more bearish. The deeper the dot is in the green zone, the more bullish.

We can confirm this by looking at its daily chart:

EURJPY 1D Below its 200 SMA

The blue line is the 200 SMA and the pink horizontal line is its price.

See how far BELOW price is from the 200 SMA?

Let’s compare this with EUR/USD:

EURUSD 1D Below its 200 SMA

The blue line is the 200 SMA and the green horizontal line is its price.

Price is also below the 200 SMA but not as much as EUR/JPY.

For kicks, let’s look at one more chart, EUR/NZD:

EURNZD 1D Below its 200 SMA

The blue line is the 200 SMA and the green horizontal line is its price.

In this chart, price is way ABOVE the blue 200 SMA….

Just like how it was visually shown on the MarketMilk™ chart above.

Which I’ll show again to help out the lazy ones who don’t want to scroll back up:

EUR Pairs and 200 SMA

As you can see above, the blue dot for EUR/NZD was way to the right.

This means price had the largest positive distance from its 200 SMA compared to all the other euro pairs.

In other words, EUR/NZD can be considered the most bullish out of all the euro pairs.

You probably don’t want to go short EUR/NZD since its long-term trend is bullish.

Instead of having to flip through each EUR pair’s chart one-by-one to find the positioning of its price relative to its 200 SMA, you can simply glance at this MarketMilk™ chart. 

What would take you at least a couple minutes will now take you a couple of seconds!

And you’re not limited to the 200 SMA. You can use 100 SMA, 50 SMA, 20 SMA, etc.

Prefer using the exponential moving average (EMA) instead of the simple moving average (SMA)? You can choose that as well.

So there you have it.

Because its price is the furthest away from its 200 SMA in the red zone, EUR/JPY is the most bearish of them all!

Not familiar with moving averages or need a refresher? Check out our free course on Moving Averages in our School of Pipsology.