Forex Day Trading Strategies For GSPD and AUDUSD – Do They Have the Best Time of Day to Day Trade Forex Eurusd?

AUDUSD

Forex Day Trading Strategies For GSPD and AUDUSD – Do They Have the Best Time of Day to Day Trade Forex Eurusd?

A new trend in Forex trading, which is growing in popularity is known as Spotting a Comeback (SAT). A recent study by two Swiss banks found that around $1.2 trillion is traded each day in Forex Spot trading. This amount pales in comparison to the turnover of trillions of dollars each day in the stock market but these losses are much easier to absorb when you trade in a less liquid financial market. In this article we look at the dynamics of the Swiss Bankmark, EURUSD and NZDUSD.

Spotting a Comeback (SAT) is an actionable strategy that can help you trade against an undervalued or overvalued price in any currency pair. Traders have long realized the power of buying low and selling high and this knowledge has translated into a strategy which is used by many traders across the world. Spotting a Comeback essentially means that you buy the EURUSD back from an undervalued price and then sell it back again once the value has regressed back to a more respectable level. The key to successful SAT is knowing where to find cheap opportunities.

Canada is a major exporter of oil and other natural resources and has a deficit with the rest of the world. As such many of its commodities such as oil, copper and wood are in high demand. Over the last few years the Canadian dollar has strengthened significantly against the US dollar and so this has had a similar impact on the CADUSD pair against the USDCAD and GBPUSD. There are many instances of the Canadian dollar strength versus US dollar weakness in the past and over the last few years these trends have consolidated.

Two other major economic indicators which have had a major impact on the AUDUSD and GBPUSD are the general health of the American economy and the status of the banking industry in Canada. The US economy has been recovering from the recent recession and although the recovery is not complete there are signs of improvement. On the other hand Canada has been dealing with the recently concluded declaration by Bank of Canada that it would be keeping its central bank rates on hold to avoid inflationary pressures. This decision has had a profound effect on global currency markets and has resulted in a sharp appreciation of the CADUSD and GBPUSD in relation to other major currencies.

Although Canadian political circumstances do not influence the trade between the CADUSD and the GBPUSD there are other equally important factors which affect the performance of these two currencies. One of the key reasons why the two currencies have been able to withstand recent market volatility is their fundamental structure. These two pairs have a very close correlation to one another and are both very strong converging. In other words, they have traded quite successfully over the last few years as price gaps have been consistently narrower than normal.

Another important factor for these forex pairs to remain strong over the course of this year is the strong uptrend they have experienced recently. The pattern that can be seen in the charts of these two pairs is a continuation of a long term uptrend. During the first part of this decade the AUDUSD and the GBPUSD were price dominant with trading patterns reflecting strong momentum in the early months. Support was established as trading volumes increased and volatility declined. Over the last six months, however this pattern has reversed and the GBPUSD has been the primary resistance to overcome over the past three weeks.

One of the many drivers of strength which is seen in these two currency pairs is their fundamental differences. The AUDUSD and the GBPUSD are distinctively different in terms of the technical indicators that traders use to analyze them. The GSPD and the USD combine a range of solid technical indicators such as moving averages and rectangles to form a successful trading strategy which has seen the pair remain strong over the last year or so. This strategy has also enabled many traders to profit from the market without needing to make very many changes to their trading plan. Traders are able to profit from the strength of these two currencies through arbitrage opportunities which allow them to profit from the different exchange rates which they see occurring on any given day.

As mentioned at the start of this article, the key for GSPD and the AUDUSD to continue to perform well over the coming months is for them to narrow price gaps. Trading conditions are likely to become even more volatile as traders look to increase volatility due to the upcoming US elections. Regardless, of the effect of the elections on the GSPD and the AUDUSD it is important for investors to remember that these currency pairs offer excellent day trading opportunities.