AUD/USD Reaction to Resistance ZoneVery strong bullish move occurred and price reached our significant zone 0.698850. We can see bearish reaction now, and it is likely to continue.
Currencypairs
Unveiling the Advantages of Trading a Single Currency Pair
Introduction:
In the world of foreign exchange (forex) trading, traders have an array of currency pairs to choose from. Among the various strategies employed by forex traders, a popular approach is to focus on trading a single currency pair. While some may argue that diversification across multiple currencies is more beneficial, trading one currency pair comes with its own set of advantages. In this article, we will explore these benefits and shed light on why concentrating on a single currency pair can maximize your trading potential.
1. Increased Specialization:
By focusing on a single currency pair, traders gain the boon of deep specialization. They can dedicate their time, energy, and resources to thoroughly studying and understanding the dynamics, trends, and drivers specific to that particular currency pair. In-depth knowledge allows traders to make more informed decisions, leading to higher chances of profitability.
2. Clarity in Market Analysis:
Trading a single currency pair enables traders to develop a comprehensive understanding of the factors driving that particular pair's movement. They can delve into technical analysis, monitor news releases, and study relevant economic indicators with greater precision and efficiency. This clarity in market analysis helps traders identify patterns and make accurate predictions, consequently enhancing their trading strategies.
3. Enhanced Risk Management:
Concentrating on one currency pair enables traders to manage risk more effectively. They can closely track and analyze historical data, volatility patterns, and overall market behavior.
4. Time Management Advantage:
Trading a single currency pair allows traders to manage their time more efficiently. Instead of spreading their attention across multiple pairs, which require continuous monitoring and analysis, traders can focus on one pair and streamline their research efforts. This time management advantage permits traders to conduct thorough analyses, develop effective trading strategies, and implement risk management techniques without being overwhelmed by the sheer volume of currency pairs.
5. Optimized Trade Execution:
Trading a single currency pair empowers traders to execute trades with greater precision and speed. Being highly specialized in a particular pair enables traders to spot opportunities promptly and take advantage of favorable trade setups.
Conclusion:
While diversification has its merits, trading a single currency pair offers unique advantages that can significantly impact a trader's success. Increased specialization, clarity in market analysis, enhanced risk management, time management advantage, optimized trade execution, and the potential for becoming an expert are some of the key benefits that traders can enjoy by focusing on one currency pair. As with any trading strategy, it is essential to conduct thorough research and practice disciplined risk management to realize the full potential of your trading endeavors
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AUD/USD 🇦🇺/🇺🇸 significant zone reactionPrice is still trending up. We can see strong bullish trend and many bullish wick rejections that indicated bullish pressure. Price reached 0.68800 zone and I will wait for a reaction.
USD/JPY broke consolidation zonePrice consolidated for a while between our significant zones. Recently, price broke 140.300 zone and retested it. It also formed new high 141.500. I advise you to wait for a reaction.
EURAUD, Bullish trend continuationthe pair has tested the support level of 1.59019 and is starting to show signs of continuing its bullish run.
check the chart for more visual details.
Big drop comingAUDNZD, is currently trading at resistance.
A sell confirmation will be the signal we need to short this pair.
AUDNZD: Turning into a sell as it approached the Channel's top.AUDNZD is on a very aggressive short-term rally following the 1.05600 Low, turning overbought on its 1D technicals (RSI = 73.113, MACD = 0.006, ADX = 40.707). As the price approached R1 (1.108900), it is gradually turning into a sell opportunity, with the Channel Up Top being just over.
Consequently, we turn bearish ourselves, targeting the bottom of the Channel Up (TP = 1.062500).
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TYPES OF CURRENCY PAIRSWhen trading Forex, it is essential to know about the different types of currency pairs, as some pairs are much riskier to trade than others, especially for those with minimal trading experience.
Major Currency Pairs
Before we discuss major currency pairs, we should first list the major currencies individually. The eight major currencies are:
US dollar (USD)
Euro (EUR)
British pound (GBP)
Japanese yen (JPY)
Swiss franc (CHF)
Canadian dollar (CAD)
Australian dollar (AUD)
New Zealand dollar (NZD)
As listed above, there are eight major currencies but there are only seven major pairs because a major pair includes the U.S. dollar. Major pairs are the most traded currency pairs on the forex market. They account for the highest average trade volume and have the most liquid markets, as well as the lowest risks and spreads offered by brokers. The seven major currency
pairs are:
EUR/USD – Euro / US dollar
GBP/USD – British Pound / US dollar
USD/JPY – US dollar / Japanese yen
AUD/USD – Australian dollar / US dollar
USD/CHF – US dollar / Swiss franc
USD/CAD – US dollar / Canadian dollar
NZD/USD – New Zealand dollar / US dollar
Note that AUD/USD and USD/CAD are sometimes also referred to as commodity currencies.
Minor Currency Pairs
Minor currency pairs (also known as cross pairs or crosses) always include two major currencies but not the U.S. dollar. Crosses are not as popular and as highly traded as the major pairs. This means they can be riskier than a major pair and will attract wider spreads from brokers. Their liquidity can also be low at times, presenting a challenge for inexperienced traders in a thin volume environment. Here are a few examples of minor currency pairs:
EUR/GBP – Euro / British pound
EUR/JPY – Euro / Japanese yen
GBP/JPY – British pound / Japanese yen
AUD/NZD – Australian dollar / New Zealand dollar
NZD/JPY – New Zealand dollar / Japanese yen
GBP/CAD – British pound / Canadian dollar
Exotic Currency Pairs
Exotic currency pairs consist of a major currency paired with a currency from a developing and emerging nations as well as certain developed nations. These currency pairs trade in a far less liquid market compared to the majors and minors as they are traded less frequently. This causes their spreads to be much higher than those of the major and minor pairs. Here are a few examples of exotic currency pairs:
EUR/TRY – Euro / Turkish lira
USD/ZAR – US dollar / South African rand
AUD/MXN – Australian dollar / Mexican peso
USD/HKD – US dollar / Hong Kong dollar
NZD/THB – New Zealand dollar / Thai baht
CAD/NGN – Canadian dollar / Nigerian naira
Risks and Spreads
Major currency pairs have the most liquidity and as a result, attract lower spreads, whilst minor and exotic pairs are much riskier and attract wider spreads.
Liquidity & Volatility
Due to high liquidity in the major currency pairs market, they are consistent and predictable, whilst minor and exotic pairs can be volatile and extremely unpredictable at times.
Please also see images below for visual examples of the difference in price behaviour of the different pair types.
MAJOR PAIR & CROSS PAIR
MAJOR PAIR & EXOTIC PAIR
CROSS PAIR & EXOTIC PAIR
Which is the best currency type to trade for new traders? We will be a posting an educational article on this in the future delving into details regarding this question.
Trade safely and responsibly.
BluetonaFX
CADJPY: Ideal sell entry now.CADJPY hit today the top of the HH trendline that started the Channel Up at the start of the year. 1D is naturally on firm green level technically (RSI = 64.634, MACD = 1.030, ADX = 45.677) but the RSI has been trading on a flat Rectangle since May 18th. It is the same pattern that led to the February 18th High. Our trigger level to sell is the crossing under the dotted Channel Up. Our target will be the 1W MA100 and bottom of the Channel Up (TP = 98.500).
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Weekly Trade Planning Session
Welcome to this week's Trade Planning Session! In this video, I examined the cumulative CSI (Currency Strength Index) of this past week and compared it to the previous weeks' cumulative CSI.
Based on this evaluation, we have identified the GBPUSD, AUDUSD, and CADJPY as potential buy pairs, while the EURAUD, EURCAD, EURGBP, and EURUSD are potential sell pairs for the upcoming week starting on June 4th, 2023.
Utilizing the 4 Bar Rules, we have determined specific buy and sell points for each pair. These points will serve as reference for making informed trading decisions throughout the week.
We hope you find this session informative and enjoyable as you navigate the exciting world of trading!
Have a blessed trading week.
EURUSD Aggressive bullish break outEURUSD is having a highly aggressive bullish break out as not only did it cross over the 3 week Channel Down pattern but also the 4H MA50 which has been unbroken since May 8th. The 4H technicals are healthy bullish (RSI = 58.132, MACD = -0.001, ADX = 39.347) and if the current 4H candle closes over the R1, we will extend our buying and target the R2 and 1D MA100 (TP = 1.08015).
Every pull back after that will be a buy opportunity, we will use the R1 as entry and lastly the 4H MA50 and target next the R3 (TP = 1.08315) where the price will also face Resistance by the 4H MA200.
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EURCAD Some downside left before the long term buy entryEURCAD is on the bearish leg of the Ascending Triangle pattern that targets the S2 Zone (1.42400 - 1.42800). Obviously the 1D technicals are bearish (RSI = 36.214, MACD = -0.006, ADX = 52.689) and our bearish target is the top of S1 at 1.43850. Regardless of S1 or S2, we have timed our long term buy entry when the 1D RSI turns oversold at 30.000. As you see the RSI has been inside a Channel Down ever since the Ascending Triangle started. Our short term targets once the buy gets activated will be the R1 and R2 (TP = 1.46480 and 1.47485 respectively).
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AUDJPY: Rejection on 1D MA200 and Channel's Top. Sell.AUDJPY has now had two rejections in less than a week on the 1D MA200, which is also at the top of the six month Channel Down pattern. The 1D technicals have already turned neutral (RSI = 50.136, MACD = 0.500, ADX = 19.362), the 1D RSI has been trading sideways inside a Rectangle while the price was on HH/ HL, which indicates a Bearish Divergence and the confirmation for a complete bearish reversal will come if the price crosses under the 1D MA50.
This is technically the bearish leg to the new LL of the Channel Down. We are targeting the S3 (TP = 86.050).
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EURCHF: Support and Channel Down Bottom. Ideal Buy opportunity.EURCHF is approaching the bottom of the January Channel Down and S1 (0.964500), followng a Death Cross on Friday. The 1D timeframe is technically red heavily (RSI = 33.995, MACD = -0.004, ADX = 37.194) and as the RSI is on a Falling Wedge, an upward break-out is very likely. Consistent with the previous two rebounds inside the Channel Down, we are aiming at a +1.94% rise, towards the Channel's top and the 1D MA200 (TP = 0.982500).
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EURJPY: Excellent sell opportunity.EURJPY is approaching the top of the one year Channel Up pattern with the 1D time frame on strong bullish technicals (RSI = 63.669, MACD = 1.080, ADX = 24.666). Once the 1D RSI breaks the 70.000 overbought level again, it will be the most optimal sell entry on a seven month basis (previous one on October 21st 2022). It is already a strong sell opportunity and we are taking a long term sell position, targeting the bottom of the Channel Up (TP = 142.000).
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NZDUSD: Strong buy signal approaching inside the Channel DownNZDUSD is trading inside a Channel Down, currently under both the 1D MA50 and 1D MA200 but approaching the bottom of the pattern. The 1D timeframe is technically bearish (RSI = 35.132, MACD = -0.002, ADX = 37.676) but when the RSI hit the bottom of the five month Rectangle it has been a buy signal. Similarly with the top being a sell signal. Those RSI tops and bottoms match perfectly the Highs and Lows of the Channel Down.
We are starting to add small portions of buy now, targeting the top of the Channel Down (TP = 0.62800). If we get a 1D candle close over the Channel Down, we will enter a buy again targeting R2 (TP = 0.65400).
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EURUSD: Is this 1W RSI Double Top something to worry about?EURUSD is on the 3rd consecutive red 1W candle with 1W technicals turning neutral (RSI = 55.304, MACD = 0.015, ADX = 31.636) and 1D bearish. The bearish alarm comes from the 1W RSI, which declined after a Double Top. The very same Double Top emerged on December 14th 2020 and January 29th 2018.
Both were at the very tops of the price, with a HH trendline present to initiate the rejection. The price reached initially the 1W MA50 (which we project can be around 1.05500) and then started a long term decline of more than 1 year.
In contrast to the other two periods, this time the pair didn't form a 1W Golden Cross, which was formed exactly on the price Tops, and didn't break (naturally) over the 1W MA200. These two divergences from the prior models, may be enough to make the rally resume the bullish trend after next week. It is interesting however that both the current and the 2020 rally rose by 16%.
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GBPJPY: Technical sell signal to the 1D MA50.GBPJPY got rejected on R1, making so far a Double Top with the October 31st 2022 High pausing a rally that has started at the beginning of the year. As the 1D technicals show (RSI = 62.785, MACD = 1.330, ADX = 28.382) the trend hasn't changed, technically it does only with a candle under the 1D MA200. But every such HH rejection always tests the 1D MA50. Based on this we are selling on the short-term, TP = 167.500.
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USDJPY: Triangle dictating the trendThe USDJPY pair is inside an Ascending Triangle on the 1D timeframe, supported by the 1D MA50 and with the technicals bullish (RSI = 59.741, MACD = 0.520, ADX = 20.018). The price is approaching R1 (138.215) and as long as it remains below it (while also the 1D RSI gets rejected on the 70.000 overbought level) we sell and target the HL of the Triangle (TP = 132.400). Buy above the R1 and target the R2 (TP = 142.200). If we close under the HL of the Triangle, sell and target the S1 (TP = 127.300). Below the S1 target the S2 (TP = 122.000).
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GBPNZD: Rebound on the 1D MA50 bullish unless Megaphone breaks.GBPNZD is rebounding on the 1D MA50, at the bottom of the thee month Rising Megaphone pattern. That is a bullish signal, which is further empowered by the neutral 1D technicals (RSI = 53.906, MACD = 0.003, ADX = 31.776) and the fact that the 0.382 Fibonacci level is holding.
As long as the price trades inside the Megaphone, we will be long, targeting the 2.0 Fibonacci (TP = 2.09500). If it closes under the Megaphone, we will book the loss and sell in reverse, targeting the 0.618 Fibonacci retracement and 1D MA200 (TP = 1.94500).
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AUDCHF: Sell Signal on a 1D MA50 rejection.The AUDCHF pair is on a long term Channel Down that has just been rejected on the 1D MA50. The 1D technicals are marginally bearish (RSI = 44.758, MACD = -0.002, ADX = 32.406) meaning that this is still a sell opportunity in its early stages. As in December, target the LL line (TP = 0.580000).
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EURAUD: May take a month to establish a Support. Accumulation.The EURAUD pair is on a strong green 1D candle today, turning 1D technicals neutral again (RSI = 48.319, MACD = 0.001, ADX = 27.956) after the 1D RSI rebounded from a 42.000 three month low yesterday. It did so after crossing under the 1D MA50 for the first time in 2.5 months.
As long as S1 holds, we see a lengthy (even 1 month) support formation, inside a long term Channel Up, a formation similar to January/ February. Our long term target is the 1.236 Fibonacci (TP = 1.69500).
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AUDNZD: Sell signal confirmed.The AUDNZD pair got rejected on the 1D MA50 turning the 1D technicals bearish (RSI = 42.793, MACD = -0.002, ADX = 30.864) for the first time in a month. The price got also rejected on the 1D MA200 and the LH trendline on April 21st, which started the current bearish leg. This may give a rise to a Channel Down. We are short, targeting the HL trendline (TP = 1.05300) and is the price closes under the S1, we expect a bearish extension to S2.
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