Technical Checks For Important JPY Pairs: 28.12.2018

USD/JPY

Having failed to cross 111.35-40 horizontal-resistance, the USDJPY again dips beneath 200-day SMA and aims for the 109.80-75 rest-region. In case oversold RSI fall short of activating the pair’s U-turn around 109.75, the 109.30, the 109.00 and the 108.60 can act as intermediate halts before drawing market attention to the 108.10-107.75 support-zone. Alternatively, an upside clearance of 111.40 on a daily closing basis could quickly fuel the quote towards the 111.80 and the 100-day SMA level of 112.40. Moreover, pair’s successful rise beyond 112.40 enables it to confront the 113.15 and a downward slanting resistance-line near 113.80.

CAD/JPY

Even after trading near the lowest levels in nine-months, the CADJPY is yet to provide a weekly closing under 80.65-50 area that has been restricting the pair’s downturn since early 2017. If at all the Bears manage to conquer 80.50, the 80.00, the 79.60 and the 78.80 are likely following numbers to appear on the chart. Meanwhile, the 82.05-15 may continue limiting the pair’s near-term advances, breaking which 83.00 & 83.50 might lure the buyers. It should also be noted that the pair’s sustained up-move past-83.50 can flash the 84.30, the 84.70 and the 85.60 on Bulls’ radars.

CHF/JPY

CHFJPY struggles with 200-day SMA level of 112.40 in order to justify its strength in targeting the 112.80 and the 113.10, comprising 50-day SMA. Though, three-month old descending trend-line, at 113.85 now, may confine the pair’s up-moves after 113.10, if not then 114.00 and the 114.40 can grab the limelight. On the downside, the 111.55-35 seem immediate support for the pair, breaking which 111.00 and the 110.60 needs to be observed carefully. Given the pair’s extended south-run below 110.60, the 110.00, the 109.45 and the 108.60 may become sellers’ favorites.

Technical Checks For USD/CHF, EUR/CHF, CHF/JPY & NZD/CHF: 19.12.2018

USD/CHF

Multiple failures to rise past the 1.0000-1.0005 region highlights the importance of short-term ascending trend-line, at 0.9900, for USDCHF traders, which if broken can quickly drag the pair to 0.9880 and then to the 0.9860 supports. However, 61.8% FE level of 0.9825 and the 0.9800 round-figure may restrict the pair’s further declines. On the upside, the 0.9960 and the 0.9985 could serve as immediate resistances for the pair before diverting market attention to 1.0000-1.0005 area for one more time. Assuming the pair’s ability to cross 1.0005 mark, the 1.0050, the 1.0080 and the 1.0110 might offer intermediate halts during the rally targeting 1.0130.

EUR/CHF

EURCHF successfully cleared a month old descending resistance-line and is heading towards 1.1355-60 resistance-zone. In case buyers refrain to respect the 1.1360 barrier, the 1.1380, the 1.1400 and the 1.1430 can appear on their radars. Meanwhile, the 1.1290 and the 1.1250 are likely adjacent rests that the pair may avail prior to visiting the 1.1230, the 1.1220 and the 1.1200 consecutive supports.

CHF/JPY

Eight-week long upward slanting support-line and near oversold RSI seem challenging the CHFJPY sellers aiming the 112.90 and the 112.45-40 levels to south. Should prices dip beneath 112.40, the 112.00, the 111.80 and the 111.50 might please the Bears. Given the pair’s U-turn from 113.10 support-line, the 113.45 and the 113.75 may entertain buyers, breaking which 113.95 TL resistance can play its role. If at all the quote surpasses 113.95 hurdle, the 114.35-40 and 114.60 could come back on the chart.

NZD/CHF

Having bounced off the 0.6745-40 region, the NZDCHF is witnessing recovery in direction to 0.6840 and then to the 0.6880-85 resistances. Though, pair’s sustained rally beyond 0.6885 enables it to confront the 0.6935, the 61.8% FE level around 0.6980 and the 0.7000 psychological-magnet. Alternatively, the 0.6755 and the 0.6745-40 can keep limiting the pair’s near-term downside. Let’s say the pair drops below 0.6740 mark, then it becomes vulnerable to plunge towards the 0.6700, the 0.6650 and the 0.6600 supports.

Technical Overview of Important JPY Pairs: 12.12.2018

USD/JPY

Although USDJPY’s U-turn from 100-day SMA & support-line of short-term symmetrical triangle helped it cross 50-day SMA, the triangle-resistance, at 114.00, could challenge the pair’s strength. Given the buyers’ ability to surpass 114.00 barrier on a daily closing basis, the 114.55 and the 115.00 might entertain them before pleasing with 61.8% FE level of 115.30. On the contrary, 50-day SMA level of 113.00 and the 112.55 can offer immediate supports to the pair ahead of highlighting 112.35-30 support-confluence for one more time. If at all prices slid beneath 112.30, the 111.60, the 111.00 and the 110.65, comprising 200-day SMA, may flash on Bears’ radars to target.

EUR/JPY

EURJPY struggles between four-month old ascending trend-line and 50-day SMA, namely the 127.70 and the 128.90 levels, with 129.30 & 126.60 being follow-on numbers to watch in case of either side breaks. Let’s say comparative strength of JPY drag the pair beneath 126.60, then the 125.55, the 125.00 and the 124.60 may become sellers’ favorites. Alternatively, the 129.70-75 resistance-zone, including 200-day SMA & nearby downward slanting TL, can try limiting the pair’s rise past-129.30, failing to which may propel it to 130.00 and the 130.50 resistance-levels.

AUD/JPY

Having reversed from 50-day & 100-day SMA joint, the AUDJPY seems heading north to 82.50 & 83.00 but 83.90 and the 84.45-55 horizontal-area could confine the pair’s additional upside. Should Bulls refrain to respect the 84.55 hurdle, the 85.60 and the 86.00 may mark their presence on the chart. Meanwhile, D1 close below 81.20 SMA intersection can quickly fetch the quote to 80.40 and the 80.00 consecutive rest-points. During the pair’s extended south-run after 80.00, the 79.45, the 79.00 and the 78.55 might gain traders’ attention.

CHF/JPY

While 114.60 triggered the CHFJPY’s pullback, counter-trend traders may only have 113.50 to be happy with as adjacent support-line, at 112.95, and the 112.30-25 region, including 200-day SMA & seven-month long ascending trend-line, can trouble them afterwards. Given the pair drops below 112.25, the 111.70 and the 111.25 could play their roles of supports. In case prices surge beyond 114.60, the 114.90 and the 115.10-15 are likely levels to limit the pair’s advances, breaking which 115.60-65 may be targeted if holding long positions. Moreover, pair’s successful rise above 115.65 can escalate the rally to 116.00 and then to the 116.50 resistances.

Technical Update For USD/CHF, EUR/CHF, CHF/JPY & CAD/CHF: 05.12.2018

USD/CHF

With nearly 100-pip range between 1.0010-05 and 0.9920-15 aptly limiting the USDCHF moves, the pair is presently expected to revisit the 0.9950 rest-point ahead of testing the 0.9915 range-support for one more time. However, pair’s drop beneath the 0.9915 can quickly fetch it to 0.9885 and the 0.9860 marks ahead of highlighting the 0.9845 as a support. Meanwhile, an upside clearance of 1.0010 could propel the quote to 1.0050 and then to the 1.0080 resistances whereas pair’s successful trading beyond 1.0080 enables it to aim for 1.0100 and the 1.0130 numbers to north.

EUR/CHF

Failure to surpass a month-long descending trend-line again drags the EURCHF to 1.1300-1.1295 support-zone, which if broken may further weaken it towards 1.1270 & 1.1260. Though, sellers’ refrain to respect the 1.1260 might not hesitate flashing 61.8% FE level of 1.1225 on the chart. Alternatively, aforementioned TL can keep restricting the pair’s near-term advances at 1.1345, breaking which the 1.1360, the 1.1400 and another resistance-line around 1.1415 may play their roles of resistances. Given the pair’s ability to cross 1.1415 barrier, it can then rise to 1.1435 & 1.1470 figures.

CHF/JPY

CHFJPY’s bounce off the 113.00-112.95 rest-region can help it target the 113.50 and the 113.75 resistances but the 113.95-114.00 may challenge buyers afterwards. Assuming the pair’s sustained rally above 114.00, the 114.20, the 114.40 and the 61.8% FE level of 114.60 could entertain Bulls. If at all prices slide below 112.95, an ascending support-line stretched since late-October might confine additional downturn at 112.70, if not then 112.40 & 112.10 could become Bears’ favorites. Moreover, pair’s extended declines past-112.10 opens the door for its plunge to 111.85 & 111.50.

CAD/CHF

Even if 0.7580-85 acts as a strong resistance-area for the CADCHF, pair’s downside may find it hard to last longer than 0.7470-65. In case the quote dips beneath 0.7465, the 0.7440, the 0.7415 and the 0.7395 can appear on pessimists radars. On the contrary, 0.7555 may cap the pair’s immediate recovery before diverting market attention to 0.7580-85. Should the pair crosses 0.7585 hurdle, the 0.7625 and the 0.7645 are likely following numbers to grab limelight.

Important JPY Pairs’ Technical Overview: 28.11.2018

USD/JPY

Following its pullback from 112.30, the USDJPY is again preparing to conquer 114.05-10 horizontal-resistance; however, a closing break above the same is required for the pair to aim for 114.55 & 114.75 numbers to north. In case prices manage to provide a D1 close beyond 114.75, the 61.8% FE level of 115.35 and the 115.50 could entertain buyers prior to pleasing them with 116.00 round-figure. On the downside, 112.90 & 112.50 may limit the pair’s near-term declines before highlighting the 112.30, the 100-day SMA level of 112.15 and an upward slanting trend-line, at 112.00, as supports. Assuming the pair’s dip beneath 112.00, the 111.30 & 110.70 might offer intermediate halts during its plunge to 110.35, comprising 200-day SMA.

EUR/JPY

EURJPY is also struggling with immediate resistance-line and can drop to 127.75 but an ascending TL, at 127.25, could challenge sellers then after. Given the pair’s refrain to respect 127.25, the 126.65-60 support-zone may gain market attention as break of which might not hesitate fetching the quote to the 126.00, the 124.95 and the 124.60 consecutive rest-points. Should the pair surpasses 128.75 adjacent barrier, it can quickly rise to 129.10 & 200-day SMA level of 129.85. Moreover, pair’s successful north-run above 129.85 could take a break near 130.00 ahead of targeting 130.55 & 131.40 resistances.

AUD/JPY

With three week long descending trend-line still being unbroken, chances of the AUDJPY’s dip to 81.85 and then to 81.65 support-line can’t be denied. If at all the pair keep trading southwards past-81.65, the 81.20, the 81.00 and the 80.40-35 may question the Bears whereas break of 80.35 could flash 80.00 & 79.75 on the their radars. Meanwhile, an upside clearance of 82.55 resistance-line can escalate the pair’s recovery to 82.80 & 83.05. Though, pair’s advances beyond 83.05 may push Bulls to opt for 61.8% FE level of 83.65 as landmarks.

CHF/JPY

Even after crossing 50-day SMA, the CHFJPY is yet to break the 113.90-95 resistance-region in order to claim the 114.20 & the 114.70 levels. In case the pair maintains strength above 114.70, the 115.05-10 can try confining its rally, if not then 115.60 & 116.00 may mark their presence on the chart. Alternatively, 113.40 & 113.00 seem immediate supports for the pair, breaking which 112.50 and an ascending support-line, at 111.90, should be observed closely. Given the pair’s sustained downturn below 111.90, the 111.50 & 110.90 may become pessimists’ favorites.

Three perspective bearish setups

Today we will not focus on any major instrument on the forex market as we have three interesting setups on more exotic pairs. First, we go to CHFJPY. The pair was having a nice bullish correction, which was initiated by the inverse head and shoulders pattern. Thee price tried to break the mid-term down trendline twice but was unsuccessful, which is a negative sign. This may create a situation, where instead of on the iH&S pattern and a rise, we will get a flag and a further downswing.

EURNZD dropped below the horizontal support after creating the double top formation. That is definitely negative and opens us away towards the long-term up trendline. The sell signal is ON.

Last instrument here is the AUDCHF, which is having a similar situation as EURNZD but the horizontal support is still fighting. That is an upper line of the ascending triangle, which was broken yesterday. That is normal that we are testing that as a support but the outcome is unknown. If the price will close a day below the orange line, we will get a major sell signal.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

Important JPY Pairs’ Technical Overview: 25.10.2018

USD/JPY

Repeated bounce off the two-month old ascending trend-line portrays the USDJPY’s strength but the pair needs to surpass 112.80-85 resistance-region in order to justify its capacity to conquer the 113.30 and the 113.55-60 levels to north. It should also be noted that the pair’s successful trading beyond 113.60 can escalate its recovery towards 114.05-10 and to the 114.55. Alternatively, pair’s dip below 112.00 support-line could take rest on 111.65-60, breaking which 111.00 & 110.70-65 may gain market attention. In case if sellers refrain to respect the 110.65 mark, the 110.30 & 109.80 might flash in their radars to target.

EUR/JPY

With the short-term descending trend-channel still being intact, the EURJPY can’t be termed strong unless clearing the 129.35 resistance, which if broken can stretch the upside to 130.45-50 prior to confronting the 130.65-70 barrier. Given the pair’s sustained advances past-130.70, there are multiple hurdles to clear between the 131.00 and the 131.30. On the downside, the 127.50 and the channel-support figure of 127.10, adjacent to 126.55-50 might keep limiting the pair’s immediate declines. If at all the quote drops beneath the 126.50, the 125.70, the 124.30 and the 124.85 could entertain the Bears.

CAD/JPY

CADJPY’s U-turn from 100-day SMA has to cross the 86.90 if it is to aim for 87.45-50 resistance-zone. Though, ability to rise above 87.50 could help prices to visit the 88.50 ahead of looking at the 89.20 and the 90.00 round-figure. Assuming the pair’s failure to hold recent uptick, the 100-day SMA level of 85.30, the 200-day SMA level of 85.00 and an upward slanting TL, at 84.80, may act as supports. However, a D1 close below 84.80 might not hesitate highlighting the 83.80 and the 83.20 numbers.

CHF/JPY

Even after closing below 200-day SMA, the CHFJPY is yet to close beneath the ascending support-line ranged from May lows, around 112.20, to mark itself weaker enough for visiting the 111.30 and the 110.60 supports. Should prices slide below 110.60, the 110.30, the 110.00 and the 109.50 may appear in limelight. Meanwhile, 200-day SMA level of 112.65 and the 113.15-25 area become strong resistances for the pair traders to watch during pullback, breaking which 113.85 and the 50-day SMA level of 114.35 can please the buyers. Let’s say the quote continue rising above 114.35, then the 115.00 and the 115.60 may pop-up in the Bulls’ list.

USDJPY aims for the monthly highs

The new week starts for us with the analysis of the USDJPY, where we do have a nice bullish setup. That is something new in October as the 10th month of the year is so far negative for this instrument and up to date, is bringing us a strong decline.

It seems that bad times are over though. First of all, in the previous week, price bounced from the long-term up trendline (green). In addition to that, USDJPY drew a bullish price formation – Inverse Head and Shoulders pattern (yellow). That formation is already active and actually, was activated today, when the price broke the neckline (upper black). Price closing a day above that life will be a confirmation of a positive sentiment on this instrument.

USD/JPY 4H Chart
USD/JPY 4H Chart

As for the target, well… first we should break the resistance on the 50% Fibonacci and later we should aim for the highs from the beginning of October. Chances that we will get there are quite high.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

Technical Checks For USD/CHF, EUR/CHF, CHF/JPY & AUD/CHF: 11.10.2018

USD/CHF

In spite of bouncing from the three-week long support-line, USDCHF couldn’t sustain its U-turn and is likely to revisit the 0.9860 rest-point, breaking which 0.9825 & 0.9800 could come back on the chart. Though, the 0.9770 horizontal-line may confine the pair’s declines past-0.9800, if not then 0.9755 & 0.9700 can appear in the sellers radar. In case the quote surpasses 0.9900 immediate resistance, a month old downward slanting TL, at 0.9955, followed by the 0.9985 and the 1.0000 round-figure, might please buyers. Moreover, pair’s successful trading beyond 1.0000 can avail 1.0035 and the 1.0065 as intermediate halts ahead of looking at the 1.01000 resistance-mark.

EUR/CHF

Unlike USDCHF, the EURCHF seems maintaining its reversal from near-term ascending trend-line but the 1.1445-55 resistance-region may challenge the pair’s advances. Should prices rise above 1.1455, the 1.1500 & 1.1525 can act as buffers during its rally to recent high around 1.1555. On the contrary, a dip beneath the 1.1385 TL support highlights the importance of 1.1340 and the 1.1310 numbers before diverting market attention to 1.1260 support-mark. Assuming the pair’s extended south-run below 1.1260, the 1.1220 & 1.1180 could become Bears’ favorites.

CHF/JPY

With the 113.25-15 support-zone triggering CHFJPY’s pullback moves, the pair may target the 114.00 and the 50-day SMA level of 114.10 prior to confronting the 114.70 & the 115.00-115.10 resistance-area. Given the pair’s ability to cross the 115.10 level, the 115.60, the 116.00 and the 116.65 might entertain the Bulls. Alternatively, a D1 close below 113.50 can quickly fetch the pair to 112.80-75 support-confluence, comprising 100-day & 200-day SMA. If at all the quote refrains to respect the 112.75, five-month old support-line, near 112.00, could limit the downside, failing to which can witness multiple supports between 111.50 and the 110.70.

AUD/CHF

AUDCHF’s uptick from 0.6970 may help it revisit the 0.7035 & 0.7060 north-side numbers but the 0.7085 resistance could restrict the pair’s additional upside. Let’s say the pair manages to conquer the 0.7085 hurdle, then it can rise to 0.7130 & 0.7175 levels with 0.7210 & 0.7225 to be observed during its further march. Meanwhile, the 0.6970 & the 0.6925 may confine the pair’s adjacent declines, breaking which 0.6870 become crucial to watch. In case 0.6870 fall short of holding the pair’s downturn, then the 61.8% FE level of 0.6800 could pop-up on the chart.

Important JPY Pairs’ Technical Checks: 05.10.2018

USD/JPY

With the 114.50-75 horizontal-region and overbought RSI restricting the USDJPY's further upside, chances of the pair's pullback to 113.35 and then to the 112.60 are quite high. However, the 112.15-10 and the 111.30-15 support-confluence, comprising 100-day SMA & upward slanting TL, could challenge the quote's declines past-113.35. In case prices refrain to respect the 111.15 mark, the 200-day SMA level of 109.80 may gain Bears' attention. On the upside, a D1 close beyond 114.75 can quickly flash 115.00 on the chart, breaking which 115.50 & 116.10 could become crucial to watch. Assuming the pair's sustained rise above 116.10, the 117.00, the 117.80 & the 118.70 might appear on the Bulls' radar to target. AUD/JPY

With the 114.50-75 horizontal-region and overbought RSI restricting the USDJPY’s further upside, chances of the pair’s pullback to 113.35 and then to the 112.60 are quite high. However, the 112.15-10 and the 111.30-15 support-confluence, comprising 100-day SMA & upward slanting TL, could challenge the quote’s declines past-113.35. In case prices refrain to respect the 111.15 mark, the 200-day SMA level of 109.80 may gain Bears’ attention. On the upside, a D1 close beyond 114.75 can quickly flash 115.00 on the chart, breaking which 115.50 & 116.10 could become crucial to watch. Assuming the pair’s sustained rise above 116.10, the 117.00, the 117.80 & the 118.70 might appear on the Bulls’ radar to target.

AUD/JPY

Not only break of 81.35-30 support-zone but short-term descending trend-line also portrays the AUDJPY’s weakness, which in-turn highlights the importance of the 80.25 support-level prior to pushing sellers to aim for the 79.95-90 rest-area. Given the pair continue trading southwards below 79.90, the 79.50 and the 78.65 can become market favorites. Meanwhile, adjacent resistance-line figure of 80.65 can limit immediate advances of the pair, breaking which 81.00 & 81.30-35 may entertain buyers. In case the pair surpasses 81.35 barrier, it’s rally to 81.75 & 82.00 could be expected.

CHF/JPY

Ever since the CHFJPY dipped below month-old ascending trend-line, it never stopped declining and signals the test of 50-day SMA level, around 114.00 now. Should 114.00 fails to trigger the pair’s U-turn, the 113.50 and the 113.25-15 rest-region can try their lucks to confine following downturn, if not then 200-day SMA level of 112.80 seems critical support to observe. Alternatively, the 115.00, the 115.60 and the 116.70 could please the counter-trend traders before emphasizing on 117.20. Also, pair’s successful break of 117.20 can shift limelight to 118.00 and the  118.55 north-side numbers.

Exotic vs Major & Minor Currencies

While the currency pairs we hear about most often are the major and minor pairs, there are actually far more exotic currency pairs to trade. In this introduction, we will define the types of currency pairs and cover some of the basics you’ll need to know before you begin trading the ‘exotics’.

Major and Minor Currency Pairs

Firstly, we should define major and minor currency pairs. The following are regarded as major currencies:

  • US Dollar (USD)
  • Euro (EUR)
  • Japanese Yen (JPY)
  • British Pound (GBP)
  • Swiss Franc (CHF)
  • Canadian Dollar (CAD)
  • Australian Dollar (AUD)
  • New Zealand Dollar (NZD)

Major currency pairs refer to any pair containing one of these currencies and the US Dollar, so while there are eight major currencies, there are only seven major currency

An important issue in the currency market is liquidity – i.e. the amount of any currency being bought or sold at any time. The most liquid currency pairs tend to have natural supply and demand from exporters and importers in addition to the supply and demand generated by speculators and investors. Since all the countries listed above have substantial trading relationships with the US, constant liquidity is provided by exporters and importers.

Minor currency pairs include any two of the major currencies apart from the USD. Some of these pairs, including GBP/EUR and AUD/JPY represent pairs of countries with active

trade relationships, providing significant liquidity. Others, like CHF/JPY and EUR/JPY, have less active natural supply and demand.

Currency Liquidity

Before we move on to exotic currencies it’s important to understand that there are two major forces driving the exchange rate between two currencies; natural supply and demand, and the relationship between those two currencies and other currencies – most notably the USD. If you exchange GBP for EUR, importers, and exporters in both the UK and Europe will be buying and selling both currencies, providing an active market. On the other hand, if you exchange GBP for NZD, there will be fewer importers, and exporters active in the market – the quotes will more likely be a combination of the GBPUSD rate and the USDNZD rate. With currencies that are even less liquid, exchanging one currency for another will inevitably involve exchanging the first currency for USD and then exchanging USD for the second currency.

Most forex brokers offer clients forex trading either in the direct currency market or via CFDs (contracts for difference). Either way, the spreads they offer depend on the liquidity of the underlying currency market. Even though you may see a pair quoted as just two currencies, for the trades to take place in the underlying market, at some point an extra leg may have to be executed by a market maker.

What are exotic currencies?

Exotic currencies are any currencies not mentioned already. Some like the Hong Kong Dollar (HKD) and Norwegian Krone (NOK) are actually very liquid, some like the Mexican Peso (MXN) and Thai Baht (THB) are fairly liquid, and others like the Malawian Kwacha (MWK) and Laos Kip (LAK) have very little liquidity.

Exotic pairs are those that include one major currency and one exotic currency. While there are over 150 countries that could be classified as developing nations, trading in exotic currencies is focussed on 18 currencies. Admiral Markets UK Ltd, a prominent forex and CFD broker, for instance, lists 19 exotic FX currency pairs including 10 exotic currencies. There are plenty of other exotic currencies, but in most cases, brokers will only offer those that their clients demand.

The following are the most widely traded exotic currencies:

  • Norwegian Krone
  • Polish Zloty
  • Czech Koruna
  • Hungarian Forint
  • Russian Ruble
  • Turkish Lira
  • Chinese Yuan Renminbi
  • Singaporean Dollar
  • Hong Kong Dollar
  • South Korean Won
  • Thai Baht
  • Malay Ringgit
  • Indonesian Rupiah
  • Indian Rupee
  • Mexican Peso
  • Brazilian Real
  • South African Rand

With any broker, the spreads being offered for a currency pair will reflect the underlying liquidity for that pair. Admiral Markets, for instance, offers spreads as low as 0.1 pip for the EURUSD pair (the most liquid pair in the world) to 5 pips for CADCHF and 10 pips for the USDCNH. For even less liquid currencies, the spreads can be much wider, in some cases reaching 800 pips.

Which Currencies Should You Trade Exotic Currencies Against?

An exotic currency will usually have better liquidity if it is traded against the currency of a major trading partner. The Turkish Lira is therefore usually traded against the Euro, the HKD against the USD or Chinese Renminbi and Mexican Peso against the US Dollar. You would struggle to find a broker offering a Malawian Kwacha/Swiss Franc pair, but even if you did, the spreads would be very wide. In most cases, exotic currencies from countries in or close to Europe are traded against the Euro, and others are traded against the USD.

Pros and Cons of trading Exotic Currencies

The currencies of developing nations are often volatile and prone to trend strongly. Some countries with large current account deficits have structurally weak currencies that have weekend consistently for decades, while others have steadily strengthened over time.

This means there are certainly opportunities for forex traders to profit. The downside is that trading costs can be high and are some currencies are prone to large, unexpected moves when government policies are changed without warning.

For the most part, traders need to have a longer-term view when trading exotic currencies than they would with major currencies. The less liquid a currency is, the longer the time horizon should be. Some, like the Norwegian Krone and Singapore Dollar, are very liquid and can be treated like major currencies. However, others, like the South African Rand and Turkish Lira are not suitable for intraday trading and are only suitable for medium-term trading under unique circumstances. In most cases, exotic currencies require time horizons of weeks to months, unless a very unique opportunity presents itself.

Secondly, traders must familiarise themselves with the typical patterns for a particular currency before trading it. Each currency has its own unique personality and there are usually good and bad times of the day and week to trade them.

Conclusion

While trading exotic currencies are less straightforward than trading major and minor pairs, they do offer very profitable opportunities. Every few years there is usually an emerging market currency crisis which results in some currencies moving as much as 20 to 30%.

These situations offer forex traders opportunities they will seldom see in major pairs. It is therefore worth learning more about these currencies and adding another tool to your trading arsenal.

Risk disclosure: Forex and CFD trading carries a high level of risk that is not suitable for all investors. Presented information is not an offer, recommendation or solicitation to buy or sell. Before making any investment decisions, you should seek advice from an independent financial advisor to ensure you understand the risks involved. Read more at admiralmarkets.com.

USDJPY climbs above all major mid-term resistances

The last week was very eventful for the USDJPY. Apart from the technical analysis, positive sentiment was strengthened here by the rise of the global exchanges. In the last week, USDJPY broke three important resistances. In theory, that should be a strong buy signal. Let us see if the positive sentiment is still here.

First, let’s deal with those broken resistances that we mentioned above. First one was the neckline of the inverse head and shoulders pattern (red). The second one was the mid-term down trendline (orange). Those two, gave the price momentum to break the last one: upper line of the wedge pattern (green). After the breakout, the price formed a small rectangle pattern (yellow) and went higher – the proper buy signal as its finest.

USD/JPY 4H Chart
USD/JPY 4H Chart

Currently, the price is undergoing a small correction but it seems that everything is under control and we should see a further upswing. As long, as we stay above the yellow area, the current drop is just a small correction. Comeback below the yellow support, can potentially kill the demand here and be an invitation for the false breakout pattern, which can reverse the powers on the USDJPY. The second option is less likely to happen.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

Technical Overview of USD/JPY, EUR/JPY, GBP/JPY & CHF/JPY: 08.08.2018

USD/JPY

Having reversed from 112.15-20 horizontal-resistance, the USDJPY now rests on 50-day SMA level of 110.80, which if broken on a daily closing basis could further fetch the quote downwards to 110.55 and 110.25-20 support-zone. In case the pair refrains to respect the 110.20 mark, its plunge to 100-day SMA level of 109.55 and a consecutive south-run to 109.00 can be expected. Should prices take a U-turn from 50-day SMA, the 111.40 may offer immediate resistance to the pair before highlighting the 112.15-20 area again. However, a D1 close beyond 112.20 might not hesitate challenging the 112.70, the 113.15 and the 61.8% FE level of 113.75.

EUR/JPY

EURJPY’s BPC (Break-Pullback-Continuation) pattern is at test for now as the pair bounces off the 128.45-55 support-region. Given the pair extend its recovery, the 129.00, the 129.55 and the 130.00 round-figure may entertain the buyers before questioning their strength by the 130.65 trend-line. Also, pair’s successful trading above 130.65 might find multiple resistances near 131.00, the 131.50 and the 132.00 numbers. Alternatively, break of 128.45 can drag the pair to 127.90 and the 127.15 whereas 126.40 and 125.60 can please the sellers. Additionally, the 125.00 and the 124.60 are likely following figures to appear on the chart past-125.60 breach.

GBP/JPY

With the GBPJPY‘s dip beneath the 143.20-143.00 broad support-zone, the pair seems aiming the 142.00 and the 141.10-141.00 rest-points during its extra weakness. If the Bears keep ruling trade sentiments after 141.00, the 140.00 and the 139.30 may flash in their radar to target. Meanwhile, pair’s D1 close above 143.20 can help it revisit the 144.30 and the 145.25 resistances but the descending trend-line, at 146.20, could restrict its upside stretch. In case the pair surpasses  the 146.20 TL, the 147.00, the 147.85 and the 148.25-30 resistance-confluence, comprising 200-day SMA & another downward slanting trend-line can raise troubles for the Bulls.

CHF/JPY

While break of 50-day SMA & near-term ascending trend-line dragged the CHFJPY to more than a week’s low, the 111.10 mark, encompassing the 100-day SMA, might confine the pair’s further declines. Given the pair’s sustained downturn below 111.10, the 110.80, the 110.25 and the 109.60 may gain market attention. On the upside clearance of 111.65-70 support-turned-resistance, the 112.20 & 112.60 can be considered as intermediate halts during the pair’s rise to 113.15-25 resistance-region. Moreover, pair’s successful trading past 113.25 can enable it to target the 61.8% FE level of 113.90 and the 114.00 round-figure.

Wednesday brings us three awesome trading setups: EURUSD, USDCAD and CHFJPY

It looks like USDCAD is ready to finish the bearish correction. The price bounced from the mid-term up trendline and lower line of the flag. What is more, we are still above the long-term down trendline. For the proper buy signal, we need to see the breakout of the red horizontal area and the upper line of the flag.

It looks like EURUSD is getting ready for another bearish wave. The beginning of the week was for the buyers. They managed to pull the price higher after the bounce from the neckline. The pull-back reached the horizontal resistance and the 38,% Fibo. That was it. The current candle is negative and it looks like the sellers are making another attempt to break the neckline.

For the past two days, CHFJPY was trying to defend the lower line of the long-term wedge. Today, sellers crashed this stronghold, which confirms the long-term sell signal created by the double top formation and two shooting stars on the weekly chart. That is potentially an awesome trade with a desirable risk to reward ratio.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

Three great setups for the long-term traders!

USDJPY is still under the influence of the inverse head and shoulders pattern, which in the last week resulted with a nice buy signal. Currently, we do have a correction but this is a flag and promotes the breakout of its upper line. Crucial here is the green support. As long, as we are above, the buy signal is on.

EURAUD finally broke the lower line of the sideways trend that lasted for the few weeks. That is a strong sell signal, additionally strengthened by the RBA and their hawkish statement. Price is now drawing the right shoulder of the H&S formation. Potential sell signal can be huuuuge.

CHFJPY is having a great pattern on the weekly chart. Double top formation on the resistance. Two shooting stars bounce from the 38,2 % Fibonacci and the breakout of the lower line of the wedge. That can be a strong sell!

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

CHFJPY Bounces from the Horizontal Resistance

Monday starts with a setup that was frequently mentioned by us on our Trading Sniper videos that we post here daily – CHFJPY. The situation here is great for the long-term position investors and can result in a long-lasting decline.

What we are having here is a double top pattern, formed on the super important horizontal resistance on the 112.80 (red). The red area was crucial as a support in the 2017 and after the breakout, is now being tested as a resistance. Both tests resulted in two shooting stars on the weekly chart. Really, cannot find better sell setup than this one. If you want more, you can see that the price bounced also from the 38,2% Fibonacci and is inside of the wedge pattern. This formation promotes a further drop and we are expecting to see the breakout of its lower line.

CHFJPY Weekly Chart
CHFJPY Weekly Chart

The current target is on the yearly lows and chances that we will get there are very high. The technical situation here is so good that a comeback above the red line seems almost impossible. Obviously, in this market, everything can happen so stay sharp and do not forget about the stop loss order. Last but not least, going short here can provide positive swaps, which is very important in terms of the long-term entries.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

The Japanese Yen Loses Its Safe-Haven Status as China-US Trade Conflict Intensifies, Global Stocks Slightly Lower

The dollar adds at the start of a new week, despite the weak employment growth in July report. The EURUSD pair is trading near the 6-weeks lows at 1.1550. Despite a poor number of jobs created, market participants felt that the Fed would maintain its commitment to the gradual tightening of the policy with two more hikes this year.

Nevertheless, the US market continues to attract investors’ interest. The strong company reporting pushes US stock indices back to the January highs. A year earlier, the rally of the indices was partially supported by the dollar weakening, but now the USD is experiencing an impressive demand. Global stocks trade slightly lower on Monday morning as trade war tensions weigh on markets.

In addition to data on the labor market, the demand for the dollar is also supported by the growing trade conflict between the US and China. China proposes to expand tariffs on US goods, including such sensitive sectors with a trading volume of $ 60 billion as liquefied natural gas and aircraft.

The consequences of the trade conflict between the US and China threaten to affect the growth of the entire region, which puts pressure on the yen as well. The Japanese currency, to some extent, loses its status of a protective currency having lost almost 6.5% to the dollar for the last 4 months as the trade conflicts have been intensifying.


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The British Pound fell below 1.30 on Friday and is now near this mark and near its annual lows.

Thus, the US currency demonstrates the strengthening of its largest competitors.

The EURUSD pair is trading at the low of the last three months. It is an important area of support, below which many orders are concentrated. A fall below 1.15 is capable of triggering an avalanche of stop orders and opening the way for a fairly rapid fall of the pair down to around 1.10, without encountering any serious technical support levels along the way.

This article was written by FxPro

Three good shorts: EURUSD, CHFJPY and FTSE

FOMC decision from yesterday did not surprise the market participants. For sure, the bullish approach towards the USD is still on the market. EURUSD is on a good way to test the lower line of the symmetric triangle pattern. Breakout is very probable, with a potential target on the long-term neckline of the H&S formation.

CHFJPY is trying to erase the gains from the first two days of this week. It is happening on a very important resistance and we do have a chance for a double top formation. On the weekly chart. Sellers are fighting for a shooting star candle, second in the 3 weeks, which can be a super strong sell signal.

FTSE broke the major up trendline and the lower line of the wedge pattern. Later, traders used both as a strong resistance. That confirms the sell signal and sets the bearish sentiment.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

The Japanese Yen is Leveling Out

After a phase of heavy growth in the middle of July, the USD has finally given Yen a chance to reassert itself. It looks like now the market is almost not interested in safe assets as Yen, for example, and is calmly assessing external risk levels.

Now, investors are paying more attention to statistics. On Monday, Japan issued an interesting release on June retail sales which allows one to assume the positive economic impulse will be restored in the II quarter of 2018. The report has demonstrated the growth of the index to 1.5% m/m after a 1.7% m/m fall in May. On a year-on-year basis the statistics are also positive: here we can see a 1.8% rise, while the forecast predicted only a 1.7% rise, with the previous value being 0.6%.

However, one cannot fully assume that it will be definitely the retail sector that will reboot the economic growth. Nevertheless, one can assume that, together with the other main fundamental reports, demonstrating the stabilization in the economic system after the decline at the beginning of the year, the retail sales indicator will lay the groundwork for the further improvement of the situation.

According to different estimates, there is a risk now for Japan to get involved in the trade wars between the US and China. As of yet, there are no compelling reasons to be afraid of it, but in theory, such possibility really exists. If the American partners again demand Japan to reduce the trade balance surplus, the economic system of the Land of the rising Sun will again find itself in the risk zone.

This week a sufficient number of Japanese statistics will be issued – on Tuesday, the July session of the Bank of Japan will be finished. More objective estimates of the further interventions of the regulator may be made following the results of this session. This is very important of the behavior of Yen.

In order to understand the current market status of the USDJPY currency pair, we have to analyze the long-term technical picture. If we evaluate the general situation by looking at the graphical analysis, we will see that the Market is slowly but surely entering a downtrend. We can interpret the current local situation as a correction in relation to the first down impulse. On the other hand, the Market is trying to secure itself below the surpassed support line, by testing it from below. In the short run, the pullback can be directed towards the levels of 111.58 and 111.88. By understanding that the downtrend is developing in the “impulse-correction-impulse” mode, we can expect the next down impulse to be directed towards the levels of 108.90 and 107.92, which corresponds to 50.0% and 61.8% according to Fibonacci, in relation to the previous uptrend.

USD/JPY 4H Chart
USD/JPY 4H Chart

This article was written by Dmitriy Gurkovskiy, a Chief Analyst at RoboForex

Important CHF Pairs’ Technical Outlook: 25.07.2018

USD/CHF

Unless breaking seven-week old ascending trend-line, at 0.9890 now, the USDCHF is less likely to extend its recent pullback towards 0.9850 and the 0.9820 support-levels. However, pair’s dip beneath the 0.9820 isn’t a sure signal for its plunge as 0.9780-90 horizontal-region, followed by the 200-day SMA level of 0.9750, may still challenge the sellers. On the contrary, the 0.9955 and the 0.9990 can entertain short-term buyers of the pair, breaking which there are multiple resistances between the 1.0035-70 area to watch. In case prices rally beyond 1.0070 on a daily closing basis, the 1.0100 and the 61.8% FE level of 1.0175 may appear in the Bulls’ radar to target.

EUR/CHF

Alike USDCHF, the EURCHF’s downside is also capped by the immediate support, herein it is the 1.1595-85 zone, that may trigger the pair’s U-turn towards nearby TL resistance figure of 1.1615. Should the quote surpasses 1.1615 barrier, it can rise to 1.1640 and then to the 1.1655-60 whereas 1.1680 and the 1.1715 may question the pair’s additional strength. If at all the pair refrains to respect the 1.1595-85 support-zone, the 1.1550 and the 1.1500 can mark their presence on the chart. Also, pair’s successful trading past-1.1500 can highlight the importance of the 1.1475, the 1.1460 and the 1.1365 supports.

GBP/CHF

GBPCHF’s recovery from nine-month old ascending trend-line may support the pair to aim for the 1.3125 and the 50-day SMA level of 1.3165 but a downward slanting TL stretched since April can confine its further upside around 1.3210. Given the pair’s D1 close above 1.3210, the 1.3270 and the 100-day SMA level of 1.3335 may please the optimists. Meanwhile, the 1.3020 can offer rest to the pair’s adjacent downturn, breaking which the 1.2970 trend-line could grab investor attention. Though, break of 1.2970 on a daily closing basis can make the pair vulnerable enough to plunge towards the 1.2910 and the 1.2850 supports.

CHF/JPY

Even after reversing from 111.70, the CHFJPY’s up-moves may soon struggle to conquer the 112.15-20 horizontal-resistance, which if broken could escalate its rise to confront the 112.60 and the 113.00 hurdles to north. Let’s say the pair manage to clear the 113.00 mark, then it can rally to the 113.25 and the 113.65, comprising 61.8% FE, resistance-levels. Alternatively, the quote’s dip below 111.70 may avail the 111.35 trend-line as a point to take a U-turn, failing to which can drag the pair to 111.00 and the 110.60 numbers. Should prices keep declining post-110.60,  the 110.30 and the 109.75 may act as buffers during its south-run to 109.00 round-figure support.