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Each currency pair has its own trading characteristics, with some  enjoying a better technical behavior than others. A more predictable currency pair either slows down ahead of a clear support or resistance line, or conversely makes a  convincing break leaving dust behind it. A less predictable pair has less respect for such lines and suffers from more choppiness.  

Update: 5 Most Predictable Currency Pairs – Q1 2015

And as markets change and evolve, so do currency pairs’ behaviors.  The leap in volatility seen in September is expected to continue through the fourth quarter, and this  change has certainly triggered a shake up in the list.  Here is an updated and ranked list of the 5 most predictable pairs for the fourth  quarter of 2014, each with its special style

  1. AUD/USD: The biggest beneficiary from the stronger volatility is this pair, that storms back to the top of the table. Respecting double bottoms (or tops) has been seen in Q3 and is likely to continue into Q4. It also went back to trading in nice channels making lower lows and lower highs to set out the downtrend. While it is unclear if the downtrend will continue, the technical behavior is certainly expected to stay high.
  2. EUR/USD: The world’s No. 1 storms back to the list: it tends to brea out to new levels, mark the top or mostly bottom) of the new range and then to settle in for some nice range trading before making the next move. Also note that most (not all) of the breakouts allow enough time for trades to jump on.
  3. GBP/USD: While wider stops are needed in cable in comparison with the euro, the  breakouts are very clear. If you can afford wider margins (perhaps with less leverage), this pair provides quite a few opportunities. The fact that the Scotland referendum is behind us, takes away one uncertainties and pushes the pair higher on the list.
  4. NZD/USD: The  turn to the downside has  hit predictability in the kiwi’s case, but the pair still remains on the list. The pair still has a good memory for veteran lines of support and resistance and it enjoyed  slipping on a downtrend support line. While still a good pair, it isn’t as good as it used to be.
  5. USD/JPY:  This pair suffers long periods of slow and unpredictable movements and then some nice big ranges, even if the bigger picture is not always clear.  We are now in a better period of trading, that sees clear trending in one direction, hesitation and then a change to the other direction. While respecting bottom and tops needs some improvement (the 110 level is an example), the pair’s false breaks can be utilized for taking the other direction.

What do you think about this list? Do you agree? Disagree? What are your favorite pairs?

Some notes:

  • USD/CAD had an OK quarter but is not expected to remain so, especially as too many moving parts are influencing this pair.
  • CHF: Due to the ongoing floor of 1.20 under EUR/CHF, the franc mostly  follows the euro, and is prone to influence from the SNB, making it unpredictable.
  • Crosses: There are quite a few interesting crosses such as EUR/GBP, GBP/JPY, AUD/NZD and EUR/CAD, but they didn’t make it to the list this time.

For reference,  here is the list for Q3 2014.

Further reading:  50 Top Forex Twitter Accounts

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