Read Larry Connors' blog – Short Term Trading Strategies
Trading Currency Crosses opens a whole new side of the currency markets, as different crosses possess different qualities that can suit any style of trading. Some crosses move fast and are extremely volatile with daily ranges that may exceed over 100 pips. While other crosses move relatively slow and exhibit low volatility, which is more suited for novice traders.
Crosses also add another dimension to traders, that is the ability to collect substantial amounts of interest (i.e. GBP/JPY, NZD/JPY and other high yielding crosses) as the positive carry created by the interest rate differentials can add to the trader’s bottom line P/L.
Euro Commodity Crosses:
1.EUR/AUD
2.EUR/CAD
EUR/AUD
Euro bulls continued their advance against the Australian dollar positions as the cross remains supported by the upward sloping channel. As the price action pushes the EURAUD above the 1.6365, a 38.2 Fib of the 1.7712-1.5532 AUD rally, the next move by the euro longs will most likely see the Australian dollar bulls scatter for higher ground and try to mount defense around the 1.6622, a level comprised of the 50.0 Fib of the 1.7712-1.5532 AUD rally, which is further reinforced by the channel’s upper boundary. Indicators signal trending conditions with ADX above 25 at 28.09, while both MACD and momentum indicator remain above the zero line, adding to positive momentum bias. Oscillators signal overbought conditions with Stochastic at 89.1 and RSI approaching 67.35.
Key Levels, Technical Indicators & Carry Trade
EUR/CAD
Euro longs maintained their momentum after the cross bounced of the 1.4521, a level marked by the 2005 low the cross tested earlier this week. As the cross continued to head higher, a break above the Loonie defenses around the 1.4936, a level marked by the 23.6 Fib of the 1.6279-1.4521 CAD rally, will most likely see the euro longs make their way toward the 1.5137, an August 5 daily spike high. Indicators signal range trading conditions with both oscillators remaining in a neutral territory, while momentum indicator remains above the zero line and MACD sloping upward toward the zero line.
Key Levels, Technical Indicators & Carry Trade
We welcome you to the world beyond majors where traders can expand their trading horizons. Please feel free to write us with any questions and suggestions you may have at sshenker@fxcm.com
Sam
Sam Shenker is a Technical Currency Analyst for Forex Capital Markets (FXCM). Sam is the author of the Daily and Weekly Technical Research reports at FXCM. His reports include: Daily Technicals, Weekly Crosses and the Weekly Chart Pack. Prior to joining FXCM, Sam spent a number of years on Wall St trading equities, equity derivatives and futures. He also specialized in research and analysis of high yield bonds, corporate bankruptcies, restructurings, reorganizations and venture capital.
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