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5 Most Predictable Currency Pairs – Q2 2017

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By Published: Last Modified: Forex Bits

What is a predictable currency pair? This is a pair that tends to respect lines of support and resistance: slowing down when approaching a significant level before backing down. And if the currency moves with full force, it will break that line, and will never look back. A previous level of support turns into resistance and the other way around. Every foreign exchange pair is slightly different., On the other extreme, we find choppy, frustrating and unpredictable currency pairs that are trouble makers for technical traders.

And like markets, nothing stays the same: some currencies improve their behavior while others just lose it. Seasonality, trends and other factors make the changes. Here is an updated and ranked list for Q2 2017.

  1. AUD/USD: The Aussie is coming back from down under. The pair behaves in a better manner when it is trending and now is the time to wake up. Lines of support and resistance immediately flip sides when broken, regaining their strength after breakouts. When in trend, the pair is likely to find its movements within clear uptrend and downtrend channels. Also when the pair is in range, its behavior is certainly positive.
  2. EUR/GBP: This cross is now also known as “the Brexit cross” as negotiations are set to begins. Various elections add fuel to the fire, and like AUD/USD, its behavior is better when it is trending. As this is a cross, we see longer periods of range trading within limited ranges, denying the cross the first place. However, EUR/GBP has a good “memory” for older lines.
  3. NZD/USD: Kiwi/dollar is making a comeback alongside its neighbor Aussie. Also here, we had a period of range trading that kept it out of the list, but this may be over. After breaking out, the pair marks the far end, and this defines the range. While not perfect, this minor pair has an above-average behavior.
  4. USD/JPY: This major pair is often overlooked by traders, but it is on the move again. Not all the lines are clear with dollar/yen, but those double bottoms and triple bottoms are dead serious: support, is support and a break is a break.
  5. EUR/USD: The world’s most popular pair closes the list for the second time in a row. It maintains its strong memory for old lines, including that 1.0340 line from 2003. However, caution is warranted around the French elections where technical levels could be forgotten. Also, it has a tendency, albeit lower than beforehand for false breaks.

What do you think? Is one of your favorites in the list or rather excluded?

Here are some important pairs that didn’t make it, with some explanations:

  • GBP/USD: While EUR/GBP is high on the list, cable has become too erratic, and we could certainly see more “flash” moves and violent squeezes, especially given the elections in the UK. Moves were always relatively sharp in this pair, with wider stops needed.
  • USD/CAD: While the trend seems to be to the upside, the pair is becoming more choppy. The OPEC deal comes to an end by the end of Q2, and more volatility could be seen, but this does not guarantee good technical behavior.
  • USD/CHF: The Swiss National Bank intervenes in markets quite frequently, so it’s best to stay away from any franc cross.

Here is the previous ranking from Q1 2017

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Get the 5 most predictable currency pairs

About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

4 Comments

  1. Marc on

    without offense Yohay but this article shouldn’t be written that way. This is like I am saying the market can go up and down. We all know this – this is Forex.

    For example AUDUSD: “Lines of support and resistance immediately flip sides when broken, regaining their strength after breakouts. When in trend, the pair is likely to find its movements within clear uptrend and downtrend channels. Also when the pair is in range, its behavior is certainly positive.” It looks like for me that you want to write an Text for the SEO and not for traders. This is part of every Tradingbook!

    Better would be if you give your personal view which levels are important for you and where you see the pair heading towards. For instance: Major Supportlevel is 0.70. With a break I am expecting a test of the 0.65 level. Nobody minds if you are wrong or not but at least it brings more value for the reader in my view. Positive: Your weekly analysis is written in a way I like it.

    Thanks!

    • Yohay Elam on

      Thanks for your comment Marc.
      My intention was to point out the more predictable pairs for those that have already read the various trading books. Some pairs work “by the book” and others don’t.
      Perhaps I should have made it clear that AUD/USD tends to respect the range more than other pairs – make less false breaks. And there is no SEO value here anyway as the article is available only to subscribers…
      And thanks for the kind words on the weekly outlooks – that’s indeed where the levels are described.
      I hope I have answered your questions and any feedback is welcome…