3 setups worth watching
If you have been watching the forex market at all lately you will have made
note of the fact that the USD is in the midst of a protracted consolidation
pretty much across the board against the other major currencies, and especially
so against the EUR, CHF, and JPY. Yes, there has been some intermediate
volatility – enough to sustain the swing and day traders for the most part – but
from the longer-term perspective there is little by way of a bias. The
crosses, however, present a more interesting picture.
Believe it or not, the chart below is the daily graph of EUR/CHF.
That’s right. The most notoriously range-bound of all major pairs is
actually in a sustained up trend which started back around the beginning of the
year. While 300 pips may not seem like much, for this pair, that is a
significant directional move given the time frame. The cross seems to have
gotten a little ahead of itself starting off this week, and a correction seems
to be underway. That should, however, provide a low risk buying
opportunity sometime soon.
Below is another interesting cross – EUR/GBP. In this case, the market
started off this week taking out resistance from late December. The pair
has since backed off that move, but still presents an interesting scenario.
If EUR/GBP can close on a daily basis back above the 0.6900 level, it should be
an indication of more upside to come.
Outside the majors, a USD-based pair worth looking at is NZD/USD. The
Kiwi is in a persistent downtrend, which has accelerated of late. And this
is not just a USD situation. The New Zealand currency has also been losing
ground against its regional neighbor the AUD.
Being able to widen out one’s market view is one of the big draws to trading
forex. There is almost always something interesting going on somewhere.
It’s just a question of looking.
John Forman is the author of
The Essentials of Trading
(Wiley) and a near 20-year veteran of trading and investing across a wide array
of markets and instruments. His analysis and market comments have been found in the financial news media across the world and he has published dozens of
magazine articles on trading methodology and analytic technique. To learn more about John’s research and trading activities, visit the
Anduril Analytics website.