Trading currency crosses opens a whole new side of the currency markets, as different crosses possess different qualities that can suit any style of trading. Some crosses move fast and are extremely volatile with daily ranges that may exceed over 100 pips. While other crosses move relatively slow and exhibit low volatility, which is more suited for novice traders.
Another added dimension to trading crosses is the ability to collect substantial amounts of interest (i.e. GBP/JPY, NZD/JPY and other high yielding crosses) as the positive carry created by the interest rate differentials can add to a trader's bottom line P/L. Discover the world beyond the majors where traders can expand their trading horizons.
All About the Crosses: [EUR/JPY] [EUR/CHF] [GBP/CHF] [GBP/JPY] [AUD/JPY]
All About the Crosses: GBP/CHF
GBP/CHF experiences a high degree of volatility, and is perfect for traders who like to catch big moves in the market! It is the most popular carry trade in the FX market aside from GBP/JPY.
For a pair with high volatility like the GBP/CHF, Fibonacci lines are an excellent way to identify price levels to which the pair will retrace after a big move. Slow stochastics can also reveal potential reversal points – ideal places to enter and exit the market when it is not trending. This pair also tends to hesitate near its 100-day simple moving average.
The best time for active traders to trade GBP/CHF is when the US and European sessions overlap, from 8:00 AM EST to 11:00 AM EST; however, moves in this volatile pair can be substantial even intra-day.
Another added dimension to trading crosses is the ability to collect substantial amounts of interest (i.e. GBP/JPY, NZD/JPY and other high yielding crosses) as the positive carry created by the interest rate differentials can add to a trader's bottom line P/L. Discover the world beyond the majors where traders can expand their trading horizons.
All About the Crosses: [EUR/JPY] [EUR/CHF] [GBP/CHF] [GBP/JPY] [AUD/JPY]
All About the Crosses: GBP/CHF
GBP/CHF experiences a high degree of volatility, and is perfect for traders who like to catch big moves in the market! It is the most popular carry trade in the FX market aside from GBP/JPY.
For a pair with high volatility like the GBP/CHF, Fibonacci lines are an excellent way to identify price levels to which the pair will retrace after a big move. Slow stochastics can also reveal potential reversal points – ideal places to enter and exit the market when it is not trending. This pair also tends to hesitate near its 100-day simple moving average.
The best time for active traders to trade GBP/CHF is when the US and European sessions overlap, from 8:00 AM EST to 11:00 AM EST; however, moves in this volatile pair can be substantial even intra-day.
GBP/CHF is very volatile- so set your stops wide!Analyst Says: Personally my favorite pair, it trades wonderfully on technical indicators and makes dramatic (almost epic) moves! If you catch a move upward late in the game, the interest will ensure that you make up for it quickly.
- Average daily range: 161 pips
- Highly volatile with sweeping ranges
- Good for: medium and long-term trades
HOT Buttons: What moves GBP/CHF?
Comments from the Bank of England Since GBP/CHF is a very popular carry trade, changes in the interest rate outlook can significantly affect the value.
UK inflation data The Bank of England tightens interest to control inflation, so the market watches inflation data to anticipate upcoming changes.
UK growth Growth in the UK is carefully monitored for any signs of a downturn or upturn. Growth can affect inflation, which in turn can affect interest rates.
Fundamentals to Watch
BoE Meeting Policy statements from the Bank of England. Changes in interest rates will affect this pair since it is a carry trading pair.
UK Unemployment Amid fears of a "jobless recovery," the market has become very sensitive to this indicator, which measures new jobs created in the UK.
UK Retail Sales Measure of the level of consumer interest in the UK. Consumer spending is one way to measure robustness and growth in the economy.
UK Inflation Inflation is closely watched since it can affect Bank of England interest rate policy.
UK Housing Prices The UK interest rate outlook is closely tied to how the housing market is doing; if growth is too little or too great it can affect monetary policy.
Swiss KoF Leading Indicators A composite of business surveys from various sectors of the economy (industry, retail and wholesale). It is combined to form a leading indicator that aims to project GDP growth approximately 8 months into the future.
Swiss CPI Consumer Price Index. A measure of inflation in Switzerland; a significant change may have implications for interest rate policy in Switzerland.
Comments from Swiss officials Watched for any indications of change in Swiss monetary policy.
Swiss GDP Gross Domestic Product. A measure of growth and productivity in the Swiss economy.
SNB Rate Decisions Any changes in the interest rate by the Swiss National Bank has implications for the pair as a carry trade.
Comments from the Bank of England Since GBP/CHF is a very popular carry trade, changes in the interest rate outlook can significantly affect the value.
UK inflation data The Bank of England tightens interest to control inflation, so the market watches inflation data to anticipate upcoming changes.
UK growth Growth in the UK is carefully monitored for any signs of a downturn or upturn. Growth can affect inflation, which in turn can affect interest rates.
Fundamentals to Watch
BoE Meeting Policy statements from the Bank of England. Changes in interest rates will affect this pair since it is a carry trading pair.
UK Unemployment Amid fears of a "jobless recovery," the market has become very sensitive to this indicator, which measures new jobs created in the UK.
UK Retail Sales Measure of the level of consumer interest in the UK. Consumer spending is one way to measure robustness and growth in the economy.
UK Inflation Inflation is closely watched since it can affect Bank of England interest rate policy.
UK Housing Prices The UK interest rate outlook is closely tied to how the housing market is doing; if growth is too little or too great it can affect monetary policy.
Swiss KoF Leading Indicators A composite of business surveys from various sectors of the economy (industry, retail and wholesale). It is combined to form a leading indicator that aims to project GDP growth approximately 8 months into the future.
Swiss CPI Consumer Price Index. A measure of inflation in Switzerland; a significant change may have implications for interest rate policy in Switzerland.
Comments from Swiss officials Watched for any indications of change in Swiss monetary policy.
Swiss GDP Gross Domestic Product. A measure of growth and productivity in the Swiss economy.
SNB Rate Decisions Any changes in the interest rate by the Swiss National Bank has implications for the pair as a carry trade.
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