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GBPUSD and USDCHF both return to converged moving averages


GBPUSD and USDCHF both moved in the direction of the strong dollar after the US jobs report, but both returned to near-converged 100/200 hourly moving averages. However, traders leaned against the converging moving averages and pushed prices back.

Looking at the GBPUSD, the 100 and 200 hourly moving averages sit at 1.2575. The high price just hit 1.2572. The current price moved back down to 1.2539 after successfully holding the moving average level.

GBPUSD finds sellers again against its 100/200 MAs

For USDCHF, it hit a high of 0.9642 shortly after the report, but has since returned to a low of 0.95993. The 100 and 200 hourly moving averages almost converged at 0.9599. The price bounced up to 0.9619.

GBPUSD and USDCHF both return to converged moving averages

USDCHF bounces off its 100/200 hourly MA

Price action can be volatile on US Jobs Day. The rise of the dollar against both the pound sterling and CHF

CHF

The Swiss franc or Confoederatio Helvetica (CHF) is the official currency of Switzerland and Liechtenstein. The CHF is currently the seventh most traded currency in the world and is treated as an important reserve currency. Unlike the other currencies of the main world economies, the CHF was distinguished by its peg to the euro (EUR). Launched in 2011, the Swiss National Bank (SNB) pegged the CHF to the EUR at a minimum exchange rate of 1.2. At the time, the peg was warranted due to the strength of the CHF in tandem with a weak EUR due to Eurozone debt. Switzerland was interested in lowering the value of its currency in what was already one of the most expensive countries in Europe. SNB Abolishes CHF Currency Peg This paved the way for the eventual removal of the EUR/CHF currency peg, which rocked the currency markets on January 15, 2015. At the time, the unexpected decision of the SNB pushed the CHF up sharply by nearly 30% in value against most major currencies. It lasted almost 45 minutes during which there was hardly any liquidity in the currency. Consequently, this made it impossible to exit trades or for most brokerages to reconcile their exposures. As a result, stops were not honored and most traders saw their accounts totally wiped out. It has also led to increased losses in the absence of negative balance protection, a particular vulnerability at present for retail traders, which has led to massive losses. Since the SNB crisis, the demand for negative balance protection has skyrocketed and become almost ubiquitous. Additionally, there has also been a push for greater awareness of risk levels when trading currencies with a declared peg to another currency by its central bank.

The Swiss franc or Confoederatio Helvetica (CHF) is the official currency of Switzerland and Liechtenstein. The CHF is currently the seventh most traded currency in the world and is treated as an important reserve currency. Unlike the other currencies of the main world economies, the CHF was distinguished by its peg to the euro (EUR). Launched in 2011, the Swiss National Bank (SNB) pegged the CHF to the EUR at a minimum exchange rate of 1.2. At the time, the peg was warranted due to the strength of the CHF in tandem with a weak EUR due to Eurozone debt. Switzerland was interested in lowering the value of its currency in what was already one of the most expensive countries in Europe. SNB Abolishes CHF Currency Peg This paved the way for the eventual removal of the EUR/CHF currency peg, which rocked the currency markets on January 15, 2015. At the time, the unexpected decision of the SNB pushed the CHF up sharply by nearly 30% in value against most major currencies. It lasted almost 45 minutes during which there was hardly any liquidity in the currency. Consequently, this made it impossible to exit trades or for most brokerages to reconcile their exposures. As a result, stops were not honored and most traders saw their accounts totally wiped out. It has also led to increased losses in the absence of negative balance protection, a particular vulnerability at present for retail traders, which has led to massive losses. Since the SNB crisis, the demand for negative balance protection has skyrocketed and become almost ubiquitous. Additionally, there has also been a push for greater awareness of risk levels when trading currencies with a declared peg to another currency by its central bank.
Read this term reached target levels. For the GBPUSD

GBP/USD

The GBP/USD is the currency pair comprising the currency of the United Kingdom, the British pound sterling (symbol £, code GBP) and the dollar of the United States of America (symbol $, code USD). The pair rate indicates how many US dollars are needed to buy one British pound. For example, when GBP/USD is trading at 1.5000, it means that 1 pound equals 1.5 dollars. GBP/USD is the fourth most traded currency pair in the forex market, giving it abundant liquidity and a low spread. While currency pair spreads vary from broker to broker, generally speaking GBP/USD often stays within the 1 pip to 3 pip spread range, making it a good candidate for scalping. . GBP/USD, also known as the “cable” (due to the transatlantic cables used to telegraph its exchange rate in the 19th century) has a positive correlation with EUR/USD and a negative correlation with EUR/USD. ‘USD/CHF. Trading GBP/USD While many traders and even brokers will argue that the best time to trade GBP/USD is during its busiest hours in London and New York, this can be a double edged sword due to the unpredictability of the couple. Its volatility also fluctuates often, and so what might be a profitable strategy one month, may not be as productive the following months. Additionally, purely technical traders can really struggle to be consistent with this pair (i.e. ignoring the fundamentals), due to the unique political nature of the UK. The recent drama surrounding Brexit has added another layer of uncertainty to this currency pair. With a soft resolution not expected in the foreseeable future, it is clear that GBP/USD will be influenced by any development and trading with the European Union.

The GBP/USD is the currency pair comprising the currency of the United Kingdom, the British pound sterling (symbol £, code GBP) and the dollar of the United States of America (symbol $, code USD). The pair rate indicates how many US dollars are needed to buy one British pound. For example, when GBP/USD is trading at 1.5000, it means that 1 pound equals 1.5 dollars. GBP/USD is the fourth most traded currency pair in the forex market, giving it abundant liquidity and a low spread. While currency pair spreads vary from broker to broker, generally speaking GBP/USD often stays within the 1 pip to 3 pip spread range, making it a good candidate for scalping. . GBP/USD, also known as the “cable” (due to the transatlantic cables used to telegraph its exchange rate in the 19th century) has a positive correlation with EUR/USD and a negative correlation with EUR/USD. ‘USD/CHF. Trading GBP/USD While many traders and even brokers will argue that the best time to trade GBP/USD is during its busiest hours in London and New York, this can be a double edged sword due to the unpredictability of the couple. Its volatility also fluctuates often, and so what might be a profitable strategy one month, may not be as productive the following months. Additionally, purely technical traders can really struggle to be consistent with this pair (i.e. ignoring the fundamentals), due to the unique political nature of the UK. The recent drama surrounding Brexit has added another layer of uncertainty to this currency pair. With a soft resolution not expected in the foreseeable future, it is clear that GBP/USD will be influenced by any development and trading with the European Union.
Read this term, the price briefly dipped below the support at 1.2524, but was unable to maintain momentum. For USDCHF, it broke yesterday’s highs at 0.96373 but quickly reversed towards the moving averages.

Nonetheless, staying below the moving averages on the GBPUSD and above the moving averages on the USDCHF maintains the bias in favor of the USD in the near term at least.


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