It becomes a tradition to post a performance review of the top currencies vs. gold at the beginning of the new year.
Fiat money is represented by 7 currencies: The US dollar (USD) and 6 components of the US dollar index (DXY) placed by weight: euro (EUR), Japanese yen (JPY), British pound (GBP), Canadian dollar (CAD), Swedish krona (SEK) and the Swiss franc (CHF).
Chart 1. Year-To-Date Dynamics Of Top 7 Currencies Versus Gold: No Comment
Diagram by Aibek Burabayev; Source: tradingview.com
The Euronews agency has a special rubric called “No comment” where they show video news without commentary as the picture speaks for itself when something dramatic, awful or really amazing is shown. I think the above diagram also speaks for itself and it shows the drama where the gold just smashed all of the fiat currencies as none of them could escape. None! Continue reading "Top Fiat Money Vs. Gold: What Shines Brighter in 2016?"
More than a year ago, on the 15th of January 2015, the market was shocked by the sharp move of the Swiss National Bank (SNB) abandoning the cap of the Swiss franc to the euro. I dedicated a special post to that event. This time, I've made a comparative chart for the period from the start of 2015 until today to show you how the SNB's move affected the safe haven currency for the past 13 months.
The Swiss franc is in an inverse cross here (CHFUSD) to comfort your perception of both assets dynamics against the US dollar.
Chart 1. Gold vs. Swiss Franc: Gold Wins Again
Chart courtesy of tradingview.com
The shock was short-lived as the currency quickly lost the gains during the first quarter of 2015. The Franc caught up with falling gold in a very tight correlation. They bottomed at the same time in March of 2015 and then reversed to the upside and peaked in May of 2015. The similarity of trends continued with the metal gapping deeper on the drops. Rare short interruptions of the link occurred last December and this month when gold increased its value and the franc didn't. Continue reading "Safe Haven Test: 1+ Year After SNB Shock"
A year ago I wrote a post to compare the top currencies dynamics against Gold inside of the year. Today I want to repeat the experiment to see which one could beat the safe haven and which one couldn't. This time, you will see a modified version of the chart where the inverse metal crosses show not Gold's (last year version), but the currencies' dynamics for easier eye perception.
To remind you of the short list, there are seven currencies compared: US dollar (USD) and 6 components of the US dollar index placed by weight: Euro (EUR), Japanese yen (JPY), British pound (GBP), Canadian dollar (CAD), Swedish krona (SEK) and the Swiss franc (CHF). Continue reading "Top Forex Pairs VS. Gold: Another One Bites The Dust"
Two weeks ago investors in the Aussie Dollar were on the receiving end of a sweet surprise. The official unemployment rate dropped to 5.9%, smashing analysts’ expectations. That suggested the Reserve Bank of Australia’s latest easing cycle, which began about a year ago, might soon be ending.
But before you jump on the Aussie bandwagon, you need the right strategy.
Aussie Outlook Looking Brighter
The truth is that the whiff of optimism had been long overdue for the Aussie Dollar. Even before the unemployment data there had been tentative signs of stabilization in the Australian economy.
Key Points Of Improvement
Continue reading "Aussie Dollar: Short to Long View"
As many countries there are that have their own currency, there are currency pairs to trade. This does not mean you should start off studying the movements of the Guatemalan Quetzal. New traders need to stick to those currencies whose indicators and movements have been well documented.
The three major currency pairs are the EUR/USD, GBP/USD and USD/JPY. If you didn’t already notice, the US dollar is listed in each one. That’s because this it the most traded currency in the market, and the one that has been studied at length.
There are three very good reasons why you should stick with these three currency pairs:
• All of them are well established currency pairs that are traded widely. This type of liquidity guarantees that you are going to profit from price changes.
• They all have the US dollar, which means that the most amount of activity will be during the New York trading hours. This adds to the liquidity as this is typically when the highest amount of Forex trading is taking place.
• Since they are so popular, a new trader is going to find a wealth of Forex trading systems online that can help them in trading these pairs successfully.
Which Ones Should You Avoid?
Any currency that is considered to be exotic or uncommon should be avoided by new traders. In some instances the financial state of the country is too unstable to be able to read the charts properly. For others, there just is not enough information available to you. A new trader needs to use as many resources as possible before placing a trade. Unless you have some first hand knowledge of Guatemala and its future financial state, you should stay far away from trading the uncommon currencies.
Focus your attention instead on the: Continue reading "Forex Currency Pairs: How to Choose the Right One Right From the Start"