By: Cory Mitchell, CMT VantagePointTrading.com
In forex trading, trade with the trend. Trends last a long time and tend to go further than people expect. Those who bought the EURUSD above 1.39 less than a year ago can attest to that, with the pair having traded as low as 1.0462 in March.
The U.S. Dollar (USD) isn't just strong against the Euro; it's strong against nearly all currencies, major and minor. For trades lasing longer than a few weeks, trading on USD strength--in alignment with the trend--is still the main play.
The USDCAD, NZDUSD and USDCHF are in a slightly different position though. Trading in the direction of USD strength is still a possibility, yet it's wise to have a few pairs to trade if the USD reverses. If the USD reverses, or even sees a deeper pullback, it is likely to be showcased in these pairs first. In fact, it has already begun.
The USDCAD hasn't given up much ground this year (relative to many other pairs), as it channeled between resistance just below 1.2840 and support just above 1.2350. Continue reading "Three Currencies To Watch Versus The U.S. Dollar"