Is there a better currency to trade vs GBP than USD?

Joe Perry CMT Forex Analytix

In our most recent “Week Ahead” we highlighted daily GBP/USD chart as our Chart of the Week. We discussed hot the 61.8% retracement level from the March 9th highs to the March 20th lows at 1.2510 was initial resistance. The pair still has yet to break above; however, the pair may just be consolidating before a move higher.

Source: Tradingview, FOREX.com

Regardless, today is March 31st, which is end of month and end of quarter. Stock indices are 20% off their lows and there has been a lot of stock re-balancing and window dressing into today. Stocks may be ready for a pullback. If that is the case, many times we see commodity currencies pull back with stocks. Therefore, perhaps we can look at a commodity currency to trade vs the GBP.

If you like the Great British Pound and you don’t want to trade it vs the US Dollar, there are other options to trade it vs different currencies, such as GBP/NZD. On a daily timeframe, we can easily see that the pair spiked to 2.1783 on March 9th, the Monday after Saudi Arabia announced they would pump oil with unlimited supply. The pair then traded lower, in volatile fashion, to the up-sloping trendline dating back to July 30th, 2019, as well as horizontal support. Over the last six trading days (including today) the pair has traded from a low of 1.9948 to today’s highs at 2.0900, a move of over 2.3%. The pair is currently pushing through the 50% retracement level from the March 9th high to the March 19th low near and approaching the spike high from March 19th at 2.10, as well as the 61.8% Fibonacci retracement level at 2.1046. These serve as the first 2 resistance levels.

Source: Tradingview, FOREX.com

On a 240-minute timeframe, the GBP/NZD has already broken higher above a falling wedge and appears to be heading towards the march 9th highs. For support, the first level is horizontal support at 2.0725. Below there, is today's lows near 2.0450 and then the downward sloping trendline near 2.0240.

Source: Tradingview, FOREX.com

The idea here is that if you like a currency to go higher or lower, make sure you always look at different counter currencies which may offer better setups, before you decide on a pair. In this case, if you like the Pound but are a skeptic of the US Dollar, you may wish to trade it vs a commodity currency, such as the New Zealand Dollar.

Author

Joe Perry CMT

Forex Analytix

Joe Perry is currently Global Head of Business Development at Forex Analytix. From 2000-2018, Joe traded at SAC Capital Advisors and then Point72 Asset Management. He has traded foreign exchange and commodity futures for the last 20 years.

EUR/USD flirts with daily highs, retargets 1.1900

EUR/USD regains upside traction, returning to the 1.1880 zone and refocusing its attention to the key 1.1900 barrier. The pair’s slight gains comes against the backdrop of a humble decline in the US Dollar as investors continue to assess the latest US CPI readings and the potential Fed’s rate path.

GBP/USD remains well bid around 1.3650

GBP/USD maintains its upside momentum in place, hovering around daily highs near 1.3650 and setting aside part of the recent three-day drop. Cable’s improved sentiment comes on the back of the Greenback’s irresolute price action, while recent hawkish comments from the BoE’s Pill also collaborate with the uptick.

Gold clings to gains just above $5,000/oz

Gold is reclaiming part of the ground lost on Wednesday’s marked decline, as bargain-hunters keep piling up and lifting prices past the key $5,000 per troy ounce. The precious metal’s move higher is also underpinned by the slight pullback in the US Dollar and declining US Treasury yields across the curve.

Crypto Today: Bitcoin, Ethereum, XRP in choppy price action, weighed down by falling institutional interest

Bitcoin's upside remains largely constrained amid weak technicals and declining institutional interest. Ethereum trades sideways above $1,900 support with the upside capped below $2,000 amid ETF outflows.

Week ahead – Data blitz, Fed Minutes and RBNZ decision in the spotlight

US GDP and PCE inflation are main highlights, plus the Fed minutes. UK and Japan have busy calendars too with focus on CPI. Flash PMIs for February will also be doing the rounds. RBNZ meets, is unlikely to follow RBA’s hawkish path.

Ripple Price Forecast: XRP potential bottom could be in sight

Ripple edges up above the intraday low of $1.35 at the time of writing on Friday amid mixed price actions across the crypto market. The remittance token failed to hold support at $1.40 the previous day, reflecting risk-off sentiment amid a decline in retail and institutional sentiment.