Dave Floyd
Aspen Trading Group
OK traders, no need to make it complicated.
If the Dollar Index (DXC) is weak, we know that pairs like EUR/USD, AUD/USD, GBP/USD and NZD/USD will be strong while pairs like USD/JPY and USD/CHF should be weak. Simple correlation here – remember college statistics?
That is not enough though, we want to know which pairs are performing better or worse than the Dollar Index (DXC) as those will likely be the best pairs to trade.
So, if we simply look at the most recent leg lower in DXC (March 11th high), we can make the assumption that the pairs which outperformed would be the ones to track going forward.
DXC is off about .62% during this time, but NZD/USD is up 1.25% (long) while USD/CHF and USD/JPY are off .80% (short).
Conclusion: only focus on NZD/USD, USD/JPY and USD/CHF. By doing this you have turned all the other noise off and know to focus 110% on set-ups in those pairs. Now you have freed up your time and eliminated the other perceived possibilities and tail chasing. That is the critical difference between those that succeed and those that merely take part!
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Editors’ Picks
EUR/USD softens below 1.1750 amid ECB rate hold expectations
The EUR/USD pair declines to around 1.1730 during the early European session on Wednesday, pressured by renewed US Dollar demand. Nonetheless, the potential downside for the major pair might be limited amid the growing acceptance that the European Central Bank is done cutting interest rates.
When is the UK CPI inflation data and how could it affect GBP/USD?
The United Kingdom Office for National Statistics will publish the highly relevant Consumer Price Index (CPI) data for November on Wednesday at 07:00 GMT. GBP/USD is likely to stay subdued if UK CPI meets expectations. However, any upside surprise could cap losses by tempering dovish sentiment ahead of the Bank of England’s policy decision on Thursday.
USD/JPY bounces to 155.00 as Japanese Yen sees pre-BoJ profit taking
USD/JPY is back on the bids, retaking 150.00 in the Asian session on Wednesday. The Japanese Yen sees fresh declines on profit-taking ahead of Friday's BoJ event risk, while the US Dollar recovers following the mixed US jobs data-led sell-off. Fedspeak awaited.
Editors’ Picks
When is the UK CPI inflation data and how could it affect GBP/USD?
The United Kingdom Office for National Statistics will publish the highly relevant Consumer Price Index (CPI) data for November on Wednesday at 07:00 GMT. GBP/USD is likely to stay subdued if UK CPI meets expectations. However, any upside surprise could cap losses by tempering dovish sentiment ahead of the Bank of England’s policy decision on Thursday.
EUR/USD softens below 1.1750 amid ECB rate hold expectations
The EUR/USD pair declines to around 1.1730 during the early European session on Wednesday, pressured by renewed US Dollar demand. Nonetheless, the potential downside for the major pair might be limited amid the growing acceptance that the European Central Bank is done cutting interest rates.
Gold: Bulls await breakout through multi-day-old range amid Fed rate cut bets
Gold attracts fresh buyers during the Asian session on Wednesday, though it remains confined in a multi-day-old trading range amid mixed fundamental cues. The global risk sentiment remains on the defensive amid economic woes and fears of the AI bubble burst. Moreover, dovish US Federal Reserve expectations lend support to the non-yielding yellow metal, though a modest US Dollar uptick might cap any further appreciating move.
Bitcoin, Ethereum and Ripple extend correction as bearish momentum builds
Bitcoin, Ethereum, and Ripple remain under pressure as the broader market continues its corrective phase into midweek. The weak price action of these top three cryptocurrencies by market capitalization suggests a deeper correction, as momentum indicators are beginning to tilt bearish.
Ukraine-Russia in the spotlight once again
Since the start of the week, gold’s price has moved lower, but has yet to erase the gains made last week. In today’s report we intend to focus on the newest round of peace talks between Russia and Ukraine, whilst noting the release of the US Employment data later on day and end our report with an update in regards to the tensions brewing in Venezuela.
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