Trading the USDCHF on July 24, 2013 44 ITM

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker 2020!
    Good Choice for Beginners!
    Free Trading Education, Free Demo Account!
    Get a Sign-Up Bonus Now!

  • Binomo
    Binomo

    2nd in our ranking!

Bloomberg

We’ve detected unusual activity from your computer network

To continue, please click the box below to let us know you’re not a robot.

Why did this happen?

Please make sure your browser supports JavaScript and cookies and that you are not blocking them from loading. For more information you can review our Terms of Service and Cookie Policy.

Need Help?

For inquiries related to this message please contact our support team and provide the reference ID below.

Forex Blog

First-hand Forex trading experience and information about foreign exchange market that will be useful to traders

Archives

Update February 2020: This post is a bit outdated now. We have since posted an updated study of Forex currency pairs that trend the most.

A successful currency trader needs a proven trading strategy. Many traders prefer strategies based on trends. Such strategies work best with currency pairs that trend well. Monitoring a predominantly currency pair (USD/KRW, for example) would yield little result, even with a solid trading strategy. The success of a trader depends on the list of currency pairs chosen for trading. The following study uses basic statistics to identify the Forex pairs that trend the most.

List of currency pairs

A retail FX trader should always choose an asset that has enough liquidity. It should not be difficult to get in or out of a trade. Furthermore, the Bid/Ask spread should not be wider than 3 pips an hour before or after some critical news event. The chosen currency pair should be volatile enough to provide considerable amount of trading opportunities. Ten currency pairs listed below in alphabetical order satisfy these conditions. According to the latest Triennial Central Bank Survey, they account for more than 50% of the daily trading volume in the foreign exchange market:

Methodology

We begin assessing the trend by subtracting the opening rate from the closing rate for a given time period. Obviously, this is a crude method of analysis. However, it can give us some hints on the pairs that trend often. Further, we also calculate a currency pair’s volatility. That will help traders to compare the trendedness of a currency pair with its susceptibility to unpredictable rate spikes.

The above calculation would be only a starting point. To identify the best of the trending currency pairs, we need to calculate precisely the number of periods a pair had been in a trend during some span of time. We need a dependable indicator to identify trend in at least three different timeframes. We use moving average for that purpose. We calculate the average and median number of consecutive closes above/below the moving average. By ranking the average of the number of closes above/below a moving average, we arrive at the most trending pair in a daily, weekly, and monthly chart.

Beginners are often advised to use an exponential moving average instead of a simple one as the former lags less (i.e. it follows a trend more quickly). We verify that as well by applying the calculations to both simple and exponential 50-period moving average.

Another method we use to assess the trendedness of the currency pairs is the consecutive or method that will be explained further below.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker 2020!
    Good Choice for Beginners!
    Free Trading Education, Free Demo Account!
    Get a Sign-Up Bonus Now!

  • Binomo
    Binomo

    2nd in our ranking!

To sum up, we shall calculate:

  • Average rate change.
  • Average volatility.
  • Average and median number of consecutive closes above/below a 50-period simple and exponential moving average.
  • Average number of consecutive or occurrences.

All calculations are repeated on three timeframes: daily, weekly, and monthly. All currency pairs are analyzed using the data of 69 months between 2020-01-01 and 2020-09-30.

Calculations

Rate change

We can calculate the positive or negative net change in the exchange rate of a currency pair in a given day, using the following formula:

where N is the total number of periods.

We rank the currency pairs using absolute value as the quantum of rate change is studied. Since the exchange rates of currency pairs differ significantly (e.g., >100 for USD/JPY and Volatility

The volatility of a currency pair can be calculated using the formula:

where N is the total number of periods.

The table summarizes the 5-year average percentage (%) volatility values of the studied currency pairs for three timeframes.

Currency pair Daily Weekly Monthly
NZD/USD 0.94 2.45 5.10
GBP/JPY 0.92 2.56 5.69
EUR/JPY 0.87 2.35 5.11
AUD/USD 0.86 2.23 4.63
USD/JPY 0.77 2.10 4.50
USD/CHF 0.73 2.01 4.24
EUR/USD 0.70 1.89 3.95
EUR/GBP 0.67 1.82 3.87
GBP/USD 0.67 1.82 3.86
USD/CAD 0.63 1.67 3.51

The NZD/USD currency pair leads the show with an average daily volatility of 0.94% over the past five years. The GBP/JPY pair follows the suit with an average of 0.92%. EUR/JPY takes the third position with an average of 0.87%. The fourth to tenth ranks reflect the order in the average daily rate change ranking list.

The weekly volatility graph paints a similar picture. The GBP/JPY and NZD/USD pairs take the first two ranks, with the average values of 2.56% and 2.45%. The EUR/JPY pair takes the third rank with a weekly average of 2.35%. From the rest of the pairs, the daily and weekly average volatility rankings are alike.

The monthly average volatility data does not provide any surprises. The GBP/JPY and EUR/JPY currency pairs take the top two ranks with the average monthly volatility values of 5.69% and 5.11%, respectively. NZD/USD takes the third place with an average monthly volatility of 5.10% over the analyzed period. The daily, weekly, and monthly volatility data indicate that the same currency pairs occupy the top three places. Similarly, the same currency pairs occupy the fourth to seventh positions in the daily, weekly, and monthly volatility ranking list.

From the above rate change and volatility data, we can infer that GBP/JPY, NZD/USD, and EUR/JPY are the three most trending and volatile pairs. We can now validate the results by calculating the Forex pairs’ consecutive closes above and below an SMA and EMA during the past five years.

Consecutive closing above/below moving average

One of the most elementary methods to detect Forex trends is to use a moving average. We calculate the average and median number of consecutive closes above and below a 50-period (daily, weekly, and monthly) moving average (SMA and EMA).

Daily
Currency pair SMA EMA
Average Median Average Median
USD/CAD 14.9 5.0 11.7 4.5
AUD/USD 14.1 5.0 11.2 4.5
GBP/JPY 13.0 5.0 11.6 4.5
NZD/USD 12.5 6.0 9.0 3.0
EUR/GBP 12.4 5.0 9.6 4.0
EUR/JPY 12.3 4.0 9.7 3.0
EUR/USD 12.0 4.0 9.8 3.0
USD/JPY 11.5 4.0 9.9 3.0
GBP/USD 11.5 4.0 10.1 4.0
USD/CHF 9.0 4.0 8.6 3.0

We can infer that USD/CAD is the best trending pair on a daily chart, when a 50-period SMA is used to identify trends. The AUD/USD and GBP/JPY pairs take up the next two ranks with an average of 14.1 and 13.0 closes above/below the SMA. The USD/CHF is the least trending pair with an average of only 9.0 closes above or below the SMA.

When an EMA is used to identify the trend on daily timeframe, USD/CAD again takes the top position. The GBP/JPY and AUD/USD pairs, with an average number of closes at 11.6 and 11.2, respectively, take the second and third position. The USD/CHF currency pair is the last one when measured by both EMA and SMA. Notably, GBP/JPY has got one of the top three ranks in the average daily rate change and volatility list.

Median values correlate heavily with the average values in this table with a notable exception of NZD/USD, which can be expected to trend the most after crossing its 50-day simple moving average.

Weekly
Currency pair SMA EMA
Average Median Average Median
EUR/GBP 30.6 19.0 17.7 7.0
USD/CAD 17.9 10.5 9.6 2.0
GBP/JPY 15.2 6.0 14.0 4.0
GBP/USD 15.1 8.0 12.2 4.0
EUR/USD 14.8 8.0 12.0 3.0
USD/JPY 13.6 4.0 15.6 6.0
NZD/USD 12.3 6.0 10.9 6.0
AUD/USD 11.3 4.5 8.3 3.5
EUR/JPY 10.8 3.0 10.7 2.0
USD/CHF 7.3 3.0 5.7 2.5

When we calculated the average number of closes above/below the 50-week SMA, we found the EUR/GBP pair as the best trending pair with an average of 30.6 closes. The USD/CAD and GBP/JPY pair are placed at the second and third place in the ranking list. However, their averages are only 17.9 and 15.2. USD/CHF takes up the last spot with an average number of 7.3.

If we look at the same metrics using the 50-week EMA, the EUR/GBP currency pair is a clear leader with the average number of closes at 17.7. USD/JPY and GBP/JPY are the second and third best trending pair with an average of 15.6 and 14.0 closes above/below the 50-week EMA. Notably, the USD/CAD pair does not fare well when the trend is identified with an exponential moving average. Still, it is USD/CHF, which occupies the last place with both types of moving average.

Monthly
Currency pair SMA EMA
Average Median Average Median
AUD/USD 33.0 33.0 15.5 12.0
USD/CAD 32.0 32.0 15.0 6.5
GBP/JPY 21.3 16.0 21.0 19.0
EUR/JPY 20.3 14.0 12.0 12.0
NZD/USD 20.3 17.0 7.7 4.0
EUR/GBP 18.3 15.0 17.3 11.5
EUR/USD 12.2 7.0 9.7 5.0
USD/JPY 12.0 4.0 15.0 9.5
USD/CHF 9.8 8.0 4.6 2.0
GBP/USD 8.4 6.0 12.2 8.0

On a monthly timeframe, the AUD/USD currency pair is the best trending pair, with an average of 33 months above or below its SMA 50. USD/CAD is placed next in the rank list with an average of 32. GBP/JPY pair occupies a distant third place with an average of 21.3. USD/CHF, which took the last place in the ranking list based on daily and weekly timeframes, has improved by one position to occupy the ninth place here. The GBP/USD pair is the worst trending pair on a monthly chart, when the assessment is made with a simple moving average.

GBP/JPY is the best trending pair on a monthly chart when measured with an EMA. EUR/GBP has taken the second place. The AUD/USD pair has occupied the third position with an average of 15.5 consecutive closes above/below its EMA. Interestingly, the USD/CAD pair moved down from the second to fourth rank compared to SMA method. So, we can infer that the monthly chart trends in USD/CAD are much better measured using a simple moving average.

Notably, so far in all the tables provided above, the GBP/JPY currency pair occupies one of the top three ranks.

Higher High + Higher Low and Lower Low + Lower High

A currency pair is generally believed to be trending if it forms consecutive Higher Highs with Higher Lows (HHHL) in an uptrend or Lower Low with Lower Highs (LLLH) in a downtrend. Additionally, a pair has to close above its open level for a rising trend and below its open for the falling trend. We calculate the average number of HHHL and LLLH patterns for each currency pair on the daily, weekly, and monthly timeframes.

Daily
Currency pair Average length of HHHL or LLLH streak
GBP/JPY 1.582
USD/JPY 1.562
EUR/JPY 1.559
GBP/USD 1.537
NZD/USD 1.528
EUR/GBP 1.525
USD/CHF 1.516
EUR/USD 1.498
USD/CAD 1.468
AUD/USD 1.449

The GBP/JPY currency pair, once again, outclasses every other currency pair taken for study and remains the best trending pair on a daily chart when we assess it with consecutive HHHL and LLLH method. While the average length of HHHL/LLLH streaks is 1.582 for GBP/JPY on a daily timeframe, USD/JPY gets close with an average of 1.562. EUR/JPY takes the third place with an average of 1.559 days. Notably, all three best pairs here are quoted in the Japanese yen. The AUD/USD pair gets the last rank with an average of 1.449 HHHL/LLLH formations.

Weekly
Currency pair Average length of HHHL or LLLH streak
GBP/JPY 1.845
EUR/JPY 1.843
USD/CAD 1.824
EUR/GBP 1.802
EUR/USD 1.788
USD/CHF 1.766
AUD/USD 1.734
USD/JPY 1.722
NZD/USD 1.699
GBP/USD 1.615

The yen continues its domination in the list of best trending currency pairs on the weekly chart as well. While GBP/JPY takes the top spot with an average trend length of 1.845 weeks, EUR/JPY follows closely with an average of 1.843. The USD/CAD currency pair, which is not a very trending pair on the daily timeframe, has now taken the third place with an average of 1.824 weeks. The GBP/USD pair takes the last place with an average of 1.615 consecutive HHHL/LLLH formations.

Monthly
Currency pair Average length of HHHL or LLLH streak
USD/CAD 1.91
EUR/GBP 1.88
EUR/JPY 1.72
GBP/JPY 1.70
USD/JPY 1.65
AUD/USD 1.63
EUR/USD 1.55
NZD/USD 1.48
GBP/USD 1.46
USD/CHF 1.35

Surprisingly, on a monthly chart, USD/CAD outshines all other currency pairs in trendedness, with an average of 1.91 consecutive HHHL/LLLH candles. The EUR/GBP and EUR/JPY currency pairs, with the averages of 1.88 and 1.72, take up the second and the third rank. Similarly to the weekly charts, GBP/USD performed worse than nearly every pair, except for USD/CHF, which stands last with an average number of mere 1.35. GBP/JPY, which topped the daily and weekly charts in trendedness, takes only the fourth position on a monthly timeframe, with an average of 1.70.

Conclusions

Our research has revealed the following facts based on the studied period of 69 months:

  • NZD/USD, GBP/JPY, and EUR/JPY are the most volatile pairs. They also exhibit the maximum average rate change on all studied timeframes.
  • USD/CAD, GBP/JPY, and AUD/USD are the best trending pairs on a daily chart when a moving average is used to identify trends.
  • GBP/JPY, USD/JPY, and EUR/JPY are the best trending pairs on a daily timeframe when measuring the number consecutive HHHL and LLLH formations.
  • EUR/GBP is the leading trending pair on a weekly chart when measured using a moving average.
  • GBP/JPY wins on a weekly timeframe with a HHHL/LLLH method.
  • AUD/USD is clearly the most trending pair on a monthly chart when using an SMA 50. If we are to switch to an EMA, the leadership goes to GBP/JPY.
  • USD/CAD trended best on a monthly chart when assessed with a HHHL/LLLH method.
  • Traders should use relatively bigger levels when trading the NZD/USD, GBP/JPY, and EUR/JPY pairs.
  • A basic moving average cross trading system has the highest chances of working with USD/CAD, AUD/USD on a daily timeframe; with EUR/GBP on a weekly timeframe; and with GBP/JPY on all timeframes.
  • Ultimately, GBP/JPY seems to trend the most of all the studied currency pairs based on the aggregate information we obtained from all the employed methods of calculation.

The behavior of a currency pair as identified in the study may or may not hold good because the past performance is not an indication of the future performance. However, our humble research can certainly serve as a starting point for traders looking for a suitable currency pair to trade on daily, weekly or monthly charts.

If you have some questions or suggestions regarding this study of the major currency pairs’ trendedness, please use the commentary form below to submit them.

Monthly Average Rates

View twenty years of exchange rate data for over 55 currencies.

Choose currency pair

Choose reporting period

  • Decimal places:
  • 2
  • 4
  • 6
Date (GMT) Rate**
Average 0.760646
31 Jan 1990 0.781105
28 Feb 1990 0.759321
31 Mar 1990 0.755618
30 Apr 1990 0.763662
31 May 1990 0.761055
30 Jun 1990 0.779029
31 Jul 1990 0.790762
31 Aug 1990 0.808713
30 Sep 1990 0.825116
31 Oct 1990 0.800595
30 Nov 1990 0.7729
31 Dec 1990 0.77019
31 Jan 1991 0.779295
28 Feb 1991 0.783505
31 Mar 1991 0.771067
30 Apr 1991 0.779468
31 May 1991 0.774268
30 Jun 1991 0.759815
31 Jul 1991 0.771559
31 Aug 1991 0.782345
30 Sep 1991 0.79369
31 Oct 1991 0.792505
30 Nov 1991 0.786595
31 Dec 1991 0.771224
31 Jan 1992 0.747557
29 Feb 1992 0.751784
31 Mar 1992 0.758645
30 Apr 1992 0.762405
31 May 1992 0.75587
30 Jun 1992 0.755605
31 Jul 1992 0.745065
31 Aug 1992 0.724786
30 Sep 1992 0.722548
31 Oct 1992 0.71481
30 Nov 1992 0.689837
31 Dec 1992 0.689736
31 Jan 1993 0.672974
28 Feb 1993 0.682937
31 Mar 1993 0.707752
30 Apr 1993 0.711545
31 May 1993 0.698585
30 Jun 1993 0.674918
31 Jul 1993 0.677876
31 Aug 1993 0.677364
30 Sep 1993 0.651667
31 Oct 1993 0.661
30 Nov 1993 0.66465
31 Dec 1993 0.673635
31 Jan 1994 0.696075
28 Feb 1994 0.716105
31 Mar 1994 0.71087
30 Apr 1994 0.715648
31 May 1994 0.724333
30 Jun 1994 0.732909
31 Jul 1994 0.734085
31 Aug 1994 0.7401
30 Sep 1994 0.742
31 Oct 1994 0.737875
30 Nov 1994 0.75492
31 Dec 1994 0.773886
31 Jan 1995 0.76469
28 Feb 1995 0.744726
31 Mar 1995 0.734517
30 Apr 1995 0.73564
31 May 1995 0.727164
30 Jun 1995 0.719591
31 Jul 1995 0.72792
31 Aug 1995 0.741365
30 Sep 1995 0.75371
31 Oct 1995 0.75699
30 Nov 1995 0.745343
31 Dec 1995 0.740525
31 Jan 1996 0.74171
29 Feb 1996 0.75557
31 Mar 1996 0.771362
30 Apr 1996 0.785664
31 May 1996 0.796995
30 Jun 1996 0.791215
31 Jul 1996 0.789741
31 Aug 1996 0.783045
30 Sep 1996 0.79279
31 Oct 1996 0.791791
30 Nov 1996 0.796837
31 Dec 1996 0.79661
31 Jan 1997 0.777557
28 Feb 1997 0.767679
31 Mar 1997 0.787471
30 Apr 1997 0.778682
31 May 1997 0.7751
30 Jun 1997 0.754224
31 Jul 1997 0.741986
31 Aug 1997 0.740362
30 Sep 1997 0.723095
31 Oct 1997 0.719714
30 Nov 1997 0.695256
31 Dec 1997 0.661873
31 Jan 1998 0.656585
28 Feb 1998 0.674363
31 Mar 1998 0.669627
30 Apr 1998 0.652309
31 May 1998 0.631235
30 Jun 1998 0.604559
31 Jul 1998 0.618022
31 Aug 1998 0.588838
30 Sep 1998 0.588862
31 Oct 1998 0.617852
30 Nov 1998 0.634942
31 Dec 1998 0.618205
31 Jan 1999 0.632438
28 Feb 1999 0.640356
31 Mar 1999 0.630812
30 Apr 1999 0.643106
31 May 1999 0.662591
30 Jun 1999 0.656407
31 Jul 1999 0.656213
31 Aug 1999 0.644636
30 Sep 1999 0.649619
31 Oct 1999 0.651144
30 Nov 1999 0.638834
31 Dec 1999 0.640753
31 Jan 2000 0.656473
29 Feb 2000 0.627936
31 Mar 2000 0.608637
30 Apr 2000 0.595797
31 May 2000 0.578235
30 Jun 2000 0.593783
31 Jul 2000 0.588344
31 Aug 2000 0.580595
30 Sep 2000 0.553183
31 Oct 2000 0.528437
30 Nov 2000 0.522436
31 Dec 2000 0.547552
31 Jan 2001 0.555634
28 Feb 2001 0.53462
31 Mar 2001 0.504155
30 Apr 2001 0.501531
31 May 2001 0.520594
30 Jun 2001 0.518121
31 Jul 2001 0.510379
31 Aug 2001 0.524508
30 Sep 2001 0.506944
31 Oct 2001 0.504499
30 Nov 2001 0.517075
31 Dec 2001 0.51426
31 Jan 2002 0.517389
28 Feb 2002 0.51305
31 Mar 2002 0.524835
30 Apr 2002 0.535586
31 May 2002 0.54908
30 Jun 2002 0.568429
31 Jul 2002 0.554785
31 Aug 2002 0.541266
30 Sep 2002 0.547205
31 Oct 2002 0.549886
30 Nov 2002 0.561445
31 Dec 2002 0.562633
31 Jan 2003 0.582156
28 Feb 2003 0.594415
31 Mar 2003 0.602405
30 Apr 2003 0.60854
31 May 2003 0.645614
30 Jun 2003 0.66493
31 Jul 2003 0.662814
31 Aug 2003 0.651724
30 Sep 2003 0.660245
31 Oct 2003 0.692937
30 Nov 2003 0.71572
31 Dec 2003 0.736881
31 Jan 2004 0.767829
29 Feb 2004 0.776447
31 Mar 2004 0.749381
30 Apr 2004 0.74861
31 May 2004 0.706948
30 Jun 2004 0.694808
31 Jul 2004 0.714939
31 Aug 2004 0.710277
30 Sep 2004 0.703539
31 Oct 2004 0.732149
30 Nov 2004 0.770377
31 Dec 2004 0.766064
31 Jan 2005 0.765886
28 Feb 2005 0.780806
31 Mar 2005 0.785669
30 Apr 2005 0.773222
31 May 2005 0.766697
30 Jun 2005 0.766312
31 Jul 2005 0.753611
31 Aug 2005 0.76235
30 Sep 2005 0.764917
31 Oct 2005 0.754216
30 Nov 2005 0.7354
31 Dec 2005 0.74205
31 Jan 2006 0.748888
28 Feb 2006 0.741646
31 Mar 2006 0.728117
30 Apr 2006 0.735298
31 May 2006 0.764506
30 Jun 2006 0.740439
31 Jul 2006 0.751108
31 Aug 2006 0.762766
30 Sep 2006 0.756105
31 Oct 2006 0.753266
30 Nov 2006 0.771959
31 Dec 2006 0.785923
31 Jan 2007 0.782585
28 Feb 2007 0.782223
31 Mar 2007 0.792145
30 Apr 2007 0.826121
31 May 2007 0.824412
30 Jun 2007 0.841369
31 Jul 2007 0.8673
31 Aug 2007 0.830764
30 Sep 2007 0.844477
31 Oct 2007 0.897676
30 Nov 2007 0.89882
31 Dec 2007 0.872079
31 Jan 2008 0.881419
29 Feb 2008 0.908731
31 Mar 2008 0.924613
30 Apr 2008 0.930074
31 May 2008 0.947824
30 Jun 2008 0.950205
31 Jul 2008 0.962141
31 Aug 2008 0.886928
30 Sep 2008 0.820207
31 Oct 2008 0.698368
30 Nov 2008 0.657614
31 Dec 2008 0.671663
31 Jan 2009 0.67825
28 Feb 2009 0.649911
31 Mar 2009 0.665408
30 Apr 2009 0.714794
31 May 2009 0.761852
30 Jun 2009 0.8039
31 Jul 2009 0.801809
31 Aug 2009 0.835031
30 Sep 2009 0.860661
31 Oct 2009 0.904449
30 Nov 2009 0.918268
31 Dec 2009 0.901461
31 Jan 2020 0.910971
28 Feb 2020 0.885171
31 Mar 2020 0.910915
30 Apr 2020 0.925888
31 May 2020 0.874617
30 Jun 2020 0.853896
31 Jul 2020 0.874687
31 Aug 2020 0.900667
30 Sep 2020 0.934946
31 Oct 2020 0.980949
30 Nov 2020 0.988948
31 Dec 2020 0.992106
31 Jan 2020 0.997458
28 Feb 2020 1.00857
31 Mar 2020 1.010227
30 Apr 2020 1.057694
31 May 2020 1.069041
30 Jun 2020 1.0605
31 Jul 2020 1.077977
31 Aug 2020 1.049288
30 Sep 2020 1.028416
31 Oct 2020 1.013382
30 Nov 2020 1.013919
31 Dec 2020 1.014037
31 Jan 2020 1.038605
29 Feb 2020 1.072094
31 Mar 2020 1.055216
30 Apr 2020 1.035825
31 May 2020 0.999002
30 Jun 2020 0.996554
31 Jul 2020 1.029849
31 Aug 2020 1.048147
30 Sep 2020 1.040441
31 Oct 2020 1.029096
30 Nov 2020 1.039525
31 Dec 2020 1.045817
31 Jan 2020 1.049211
28 Feb 2020 1.032333
31 Mar 2020 1.033905
30 Apr 2020 1.037919
31 May 2020 0.993495
30 Jun 2020 0.944223
31 Jul 2020 0.915825
31 Aug 2020 0.904539
30 Sep 2020 0.925886
31 Oct 2020 0.951809
30 Nov 2020 0.932589
31 Dec 2020 0.898481
31 Jan 2020 0.885959
28 Feb 2020 0.895596
31 Mar 2020 0.907179
30 Apr 2020 0.931476
31 May 2020 0.935072
30 Jun 2020 0.936401
31 Jul 2020 0.939235
31 Aug 2020 0.930935
30 Sep 2020 0.906378
31 Oct 2020 0.876443
30 Nov 2020 0.866082
31 Dec 2020 0.824382
31 Jan 2020 0.808002
28 Feb 2020 0.779628
31 Mar 2020 0.773236
30 Apr 2020 0.772879
31 May 2020 0.788624
30 Jun 2020 0.770904
31 Jul 2020 0.742075
31 Aug 2020 0.730924
30 Sep 2020 0.706281
31 Oct 2020 0.720566
30 Nov 2020 0.714379
31 Dec 2020 0.724635
31 Jan 2020 0.703091
29 Feb 2020 0.712552
31 Mar 2020 0.749411
30 Apr 2020 0.766435
31 May 2020 0.732371
30 Jun 2020 0.739273
31 Jul 2020 0.752822
31 Aug 2020 0.762738
30 Sep 2020 0.757159
31 Oct 2020 0.761607
30 Nov 2020 0.752025
31 Dec 2020 0.733774
31 Jan 2020 0.745303
28 Feb 2020 0.766843
31 Mar 2020 0.762076
30 Apr 2020 0.753423
31 May 2020 0.743242
30 Jun 2020 0.755527
31 Jul 2020 0.780004
31 Aug 2020 0.791564
30 Sep 2020 0.797674
31 Oct 2020 0.778581
30 Nov 2020 0.762175
31 Dec 2020 0.765781
31 Jan 2020 0.7954
28 Feb 2020 0.786972
31 Mar 2020 0.775811
30 Apr 2020 0.768174
31 May 2020 0.75304
30 Jun 2020 0.749633
31 Jul 2020 0.740481
31 Aug 2020 0.732792
30 Sep 2020 0.720047
31 Oct 2020 0.710399
30 Nov 2020 0.724688
31 Dec 2020 0.716011
31 Jan 2020 0.715311
28 Feb 2020 0.714243
31 Mar 2020 0.707874
30 Apr 2020 0.711352
31 May 2020 0.694645
30 Jun 2020 0.694795
31 Jul 2020 0.698253
31 Aug 2020 0.67743
30 Sep 2020 0.680854
31 Oct 2020 0.680027
30 Nov 2020 0.68277
31 Dec 2020 0.688739
31 Jan 2020 0.686675
29 Feb 2020 0.666451
31 Mar 2020 0.62205
Average <>
<> <>
  • <>
  • The request has failed for an unknown reason.

Learn more about transferring with OFX

Keep track of exchange rates

These tools can help you get the best rate.

Forex Blog

First-hand Forex trading experience and information about foreign exchange market that will be useful to traders

Archives

Update February 2020: This post is a bit outdated now. We have since posted an updated study of Forex currency pairs that trend the most.

A successful currency trader needs a proven trading strategy. Many traders prefer strategies based on trends. Such strategies work best with currency pairs that trend well. Monitoring a predominantly currency pair (USD/KRW, for example) would yield little result, even with a solid trading strategy. The success of a trader depends on the list of currency pairs chosen for trading. The following study uses basic statistics to identify the Forex pairs that trend the most.

List of currency pairs

A retail FX trader should always choose an asset that has enough liquidity. It should not be difficult to get in or out of a trade. Furthermore, the Bid/Ask spread should not be wider than 3 pips an hour before or after some critical news event. The chosen currency pair should be volatile enough to provide considerable amount of trading opportunities. Ten currency pairs listed below in alphabetical order satisfy these conditions. According to the latest Triennial Central Bank Survey, they account for more than 50% of the daily trading volume in the foreign exchange market:

Methodology

We begin assessing the trend by subtracting the opening rate from the closing rate for a given time period. Obviously, this is a crude method of analysis. However, it can give us some hints on the pairs that trend often. Further, we also calculate a currency pair’s volatility. That will help traders to compare the trendedness of a currency pair with its susceptibility to unpredictable rate spikes.

The above calculation would be only a starting point. To identify the best of the trending currency pairs, we need to calculate precisely the number of periods a pair had been in a trend during some span of time. We need a dependable indicator to identify trend in at least three different timeframes. We use moving average for that purpose. We calculate the average and median number of consecutive closes above/below the moving average. By ranking the average of the number of closes above/below a moving average, we arrive at the most trending pair in a daily, weekly, and monthly chart.

Beginners are often advised to use an exponential moving average instead of a simple one as the former lags less (i.e. it follows a trend more quickly). We verify that as well by applying the calculations to both simple and exponential 50-period moving average.

Another method we use to assess the trendedness of the currency pairs is the consecutive or method that will be explained further below.

To sum up, we shall calculate:

  • Average rate change.
  • Average volatility.
  • Average and median number of consecutive closes above/below a 50-period simple and exponential moving average.
  • Average number of consecutive or occurrences.

All calculations are repeated on three timeframes: daily, weekly, and monthly. All currency pairs are analyzed using the data of 69 months between 2020-01-01 and 2020-09-30.

Calculations

Rate change

We can calculate the positive or negative net change in the exchange rate of a currency pair in a given day, using the following formula:

where N is the total number of periods.

We rank the currency pairs using absolute value as the quantum of rate change is studied. Since the exchange rates of currency pairs differ significantly (e.g., >100 for USD/JPY and Volatility

The volatility of a currency pair can be calculated using the formula:

where N is the total number of periods.

The table summarizes the 5-year average percentage (%) volatility values of the studied currency pairs for three timeframes.

Currency pair Daily Weekly Monthly
NZD/USD 0.94 2.45 5.10
GBP/JPY 0.92 2.56 5.69
EUR/JPY 0.87 2.35 5.11
AUD/USD 0.86 2.23 4.63
USD/JPY 0.77 2.10 4.50
USD/CHF 0.73 2.01 4.24
EUR/USD 0.70 1.89 3.95
EUR/GBP 0.67 1.82 3.87
GBP/USD 0.67 1.82 3.86
USD/CAD 0.63 1.67 3.51

The NZD/USD currency pair leads the show with an average daily volatility of 0.94% over the past five years. The GBP/JPY pair follows the suit with an average of 0.92%. EUR/JPY takes the third position with an average of 0.87%. The fourth to tenth ranks reflect the order in the average daily rate change ranking list.

The weekly volatility graph paints a similar picture. The GBP/JPY and NZD/USD pairs take the first two ranks, with the average values of 2.56% and 2.45%. The EUR/JPY pair takes the third rank with a weekly average of 2.35%. From the rest of the pairs, the daily and weekly average volatility rankings are alike.

The monthly average volatility data does not provide any surprises. The GBP/JPY and EUR/JPY currency pairs take the top two ranks with the average monthly volatility values of 5.69% and 5.11%, respectively. NZD/USD takes the third place with an average monthly volatility of 5.10% over the analyzed period. The daily, weekly, and monthly volatility data indicate that the same currency pairs occupy the top three places. Similarly, the same currency pairs occupy the fourth to seventh positions in the daily, weekly, and monthly volatility ranking list.

From the above rate change and volatility data, we can infer that GBP/JPY, NZD/USD, and EUR/JPY are the three most trending and volatile pairs. We can now validate the results by calculating the Forex pairs’ consecutive closes above and below an SMA and EMA during the past five years.

Consecutive closing above/below moving average

One of the most elementary methods to detect Forex trends is to use a moving average. We calculate the average and median number of consecutive closes above and below a 50-period (daily, weekly, and monthly) moving average (SMA and EMA).

Daily
Currency pair SMA EMA
Average Median Average Median
USD/CAD 14.9 5.0 11.7 4.5
AUD/USD 14.1 5.0 11.2 4.5
GBP/JPY 13.0 5.0 11.6 4.5
NZD/USD 12.5 6.0 9.0 3.0
EUR/GBP 12.4 5.0 9.6 4.0
EUR/JPY 12.3 4.0 9.7 3.0
EUR/USD 12.0 4.0 9.8 3.0
USD/JPY 11.5 4.0 9.9 3.0
GBP/USD 11.5 4.0 10.1 4.0
USD/CHF 9.0 4.0 8.6 3.0

We can infer that USD/CAD is the best trending pair on a daily chart, when a 50-period SMA is used to identify trends. The AUD/USD and GBP/JPY pairs take up the next two ranks with an average of 14.1 and 13.0 closes above/below the SMA. The USD/CHF is the least trending pair with an average of only 9.0 closes above or below the SMA.

When an EMA is used to identify the trend on daily timeframe, USD/CAD again takes the top position. The GBP/JPY and AUD/USD pairs, with an average number of closes at 11.6 and 11.2, respectively, take the second and third position. The USD/CHF currency pair is the last one when measured by both EMA and SMA. Notably, GBP/JPY has got one of the top three ranks in the average daily rate change and volatility list.

Median values correlate heavily with the average values in this table with a notable exception of NZD/USD, which can be expected to trend the most after crossing its 50-day simple moving average.

Weekly
Currency pair SMA EMA
Average Median Average Median
EUR/GBP 30.6 19.0 17.7 7.0
USD/CAD 17.9 10.5 9.6 2.0
GBP/JPY 15.2 6.0 14.0 4.0
GBP/USD 15.1 8.0 12.2 4.0
EUR/USD 14.8 8.0 12.0 3.0
USD/JPY 13.6 4.0 15.6 6.0
NZD/USD 12.3 6.0 10.9 6.0
AUD/USD 11.3 4.5 8.3 3.5
EUR/JPY 10.8 3.0 10.7 2.0
USD/CHF 7.3 3.0 5.7 2.5

When we calculated the average number of closes above/below the 50-week SMA, we found the EUR/GBP pair as the best trending pair with an average of 30.6 closes. The USD/CAD and GBP/JPY pair are placed at the second and third place in the ranking list. However, their averages are only 17.9 and 15.2. USD/CHF takes up the last spot with an average number of 7.3.

If we look at the same metrics using the 50-week EMA, the EUR/GBP currency pair is a clear leader with the average number of closes at 17.7. USD/JPY and GBP/JPY are the second and third best trending pair with an average of 15.6 and 14.0 closes above/below the 50-week EMA. Notably, the USD/CAD pair does not fare well when the trend is identified with an exponential moving average. Still, it is USD/CHF, which occupies the last place with both types of moving average.

Monthly
Currency pair SMA EMA
Average Median Average Median
AUD/USD 33.0 33.0 15.5 12.0
USD/CAD 32.0 32.0 15.0 6.5
GBP/JPY 21.3 16.0 21.0 19.0
EUR/JPY 20.3 14.0 12.0 12.0
NZD/USD 20.3 17.0 7.7 4.0
EUR/GBP 18.3 15.0 17.3 11.5
EUR/USD 12.2 7.0 9.7 5.0
USD/JPY 12.0 4.0 15.0 9.5
USD/CHF 9.8 8.0 4.6 2.0
GBP/USD 8.4 6.0 12.2 8.0

On a monthly timeframe, the AUD/USD currency pair is the best trending pair, with an average of 33 months above or below its SMA 50. USD/CAD is placed next in the rank list with an average of 32. GBP/JPY pair occupies a distant third place with an average of 21.3. USD/CHF, which took the last place in the ranking list based on daily and weekly timeframes, has improved by one position to occupy the ninth place here. The GBP/USD pair is the worst trending pair on a monthly chart, when the assessment is made with a simple moving average.

GBP/JPY is the best trending pair on a monthly chart when measured with an EMA. EUR/GBP has taken the second place. The AUD/USD pair has occupied the third position with an average of 15.5 consecutive closes above/below its EMA. Interestingly, the USD/CAD pair moved down from the second to fourth rank compared to SMA method. So, we can infer that the monthly chart trends in USD/CAD are much better measured using a simple moving average.

Notably, so far in all the tables provided above, the GBP/JPY currency pair occupies one of the top three ranks.

Higher High + Higher Low and Lower Low + Lower High

A currency pair is generally believed to be trending if it forms consecutive Higher Highs with Higher Lows (HHHL) in an uptrend or Lower Low with Lower Highs (LLLH) in a downtrend. Additionally, a pair has to close above its open level for a rising trend and below its open for the falling trend. We calculate the average number of HHHL and LLLH patterns for each currency pair on the daily, weekly, and monthly timeframes.

Daily
Currency pair Average length of HHHL or LLLH streak
GBP/JPY 1.582
USD/JPY 1.562
EUR/JPY 1.559
GBP/USD 1.537
NZD/USD 1.528
EUR/GBP 1.525
USD/CHF 1.516
EUR/USD 1.498
USD/CAD 1.468
AUD/USD 1.449

The GBP/JPY currency pair, once again, outclasses every other currency pair taken for study and remains the best trending pair on a daily chart when we assess it with consecutive HHHL and LLLH method. While the average length of HHHL/LLLH streaks is 1.582 for GBP/JPY on a daily timeframe, USD/JPY gets close with an average of 1.562. EUR/JPY takes the third place with an average of 1.559 days. Notably, all three best pairs here are quoted in the Japanese yen. The AUD/USD pair gets the last rank with an average of 1.449 HHHL/LLLH formations.

Weekly
Currency pair Average length of HHHL or LLLH streak
GBP/JPY 1.845
EUR/JPY 1.843
USD/CAD 1.824
EUR/GBP 1.802
EUR/USD 1.788
USD/CHF 1.766
AUD/USD 1.734
USD/JPY 1.722
NZD/USD 1.699
GBP/USD 1.615

The yen continues its domination in the list of best trending currency pairs on the weekly chart as well. While GBP/JPY takes the top spot with an average trend length of 1.845 weeks, EUR/JPY follows closely with an average of 1.843. The USD/CAD currency pair, which is not a very trending pair on the daily timeframe, has now taken the third place with an average of 1.824 weeks. The GBP/USD pair takes the last place with an average of 1.615 consecutive HHHL/LLLH formations.

Monthly
Currency pair Average length of HHHL or LLLH streak
USD/CAD 1.91
EUR/GBP 1.88
EUR/JPY 1.72
GBP/JPY 1.70
USD/JPY 1.65
AUD/USD 1.63
EUR/USD 1.55
NZD/USD 1.48
GBP/USD 1.46
USD/CHF 1.35

Surprisingly, on a monthly chart, USD/CAD outshines all other currency pairs in trendedness, with an average of 1.91 consecutive HHHL/LLLH candles. The EUR/GBP and EUR/JPY currency pairs, with the averages of 1.88 and 1.72, take up the second and the third rank. Similarly to the weekly charts, GBP/USD performed worse than nearly every pair, except for USD/CHF, which stands last with an average number of mere 1.35. GBP/JPY, which topped the daily and weekly charts in trendedness, takes only the fourth position on a monthly timeframe, with an average of 1.70.

Conclusions

Our research has revealed the following facts based on the studied period of 69 months:

  • NZD/USD, GBP/JPY, and EUR/JPY are the most volatile pairs. They also exhibit the maximum average rate change on all studied timeframes.
  • USD/CAD, GBP/JPY, and AUD/USD are the best trending pairs on a daily chart when a moving average is used to identify trends.
  • GBP/JPY, USD/JPY, and EUR/JPY are the best trending pairs on a daily timeframe when measuring the number consecutive HHHL and LLLH formations.
  • EUR/GBP is the leading trending pair on a weekly chart when measured using a moving average.
  • GBP/JPY wins on a weekly timeframe with a HHHL/LLLH method.
  • AUD/USD is clearly the most trending pair on a monthly chart when using an SMA 50. If we are to switch to an EMA, the leadership goes to GBP/JPY.
  • USD/CAD trended best on a monthly chart when assessed with a HHHL/LLLH method.
  • Traders should use relatively bigger levels when trading the NZD/USD, GBP/JPY, and EUR/JPY pairs.
  • A basic moving average cross trading system has the highest chances of working with USD/CAD, AUD/USD on a daily timeframe; with EUR/GBP on a weekly timeframe; and with GBP/JPY on all timeframes.
  • Ultimately, GBP/JPY seems to trend the most of all the studied currency pairs based on the aggregate information we obtained from all the employed methods of calculation.

The behavior of a currency pair as identified in the study may or may not hold good because the past performance is not an indication of the future performance. However, our humble research can certainly serve as a starting point for traders looking for a suitable currency pair to trade on daily, weekly or monthly charts.

If you have some questions or suggestions regarding this study of the major currency pairs’ trendedness, please use the commentary form below to submit them.

Top 5 Things to Know in the Market on Friday

Investing.com – Here are the top five things you need to know in financial markets on Friday, June 21:

1. Stocks pause as U.S.-Iran tensions rise

The stock rally that followed the Federal Reserve’s signal of interest rate cuts this year faded on Friday as escalating tensions between the U.S. and Iran hit risk appetite .

U.S. President Donald Trump had approved military strikes against Iran on Friday in retaliation for the downing of a U.S. surveillance drone, but called off the attacks at the last minute, according to a New York Times report.

U.S. futures pointed to a lower open after the S&P 500 closed at a record high on Thursday. Dow futures fell 28 points, or 0.1%, by 5:42 AM ET (9:42 GMT), S&P 500 futures dropped 5 points, or 0.2%, while Nasdaq 100 futures traded down 20 points, or 0.3%.

European stocks also paused for breath with the pan-European Stoxx 600 slightly lower, pulling back from a weekly gain of nearly 5%.

Asian shares were also mostly lower at the close, though China’s Shanghai Composite bucked the general trend, ending 0.5% higher after signs of more liquidity support from the People’s Bank of China.

2. Gold pops above $1,400 to 6-year high

Spot gold surged past $1,400 overnight to its highest level since September 2020, reaching a weekly gain of nearly 5% before the rally began to fade in early morning trade on Friday.

Gold futures saw a similar price move past the $1,400 level to reach prices not seen July 2020.

The yellow metal has primarily benefited this week from the Fed’s change in outlook, which has fostered expectations of up to three rate cuts this year and driven the dollar nearly 1% lower.

Signs that central banks from Europe, Japan and Australia are also willing to ease policy to support a slowing economic outlook, geopolitical tensions between the U.S. and Iran and the unresolved U.S.-China trade dispute have increased demand for the safe haven metal.

3. Oil on track for 9% weekly surge

U.S. crude oil futures extended gains on Friday, bringing their weekly gain close to 9%, amid growing fears that supply out of the Persian Gulf could be disrupted by the standoff between the U.S. and Iran. Any disruptions would further tighten global supply, given that OPEC and its allies plan to extend their existing agreement on output restraint at the beginning of July.

At the same time, concerns over the global demand outlook have receded a little on hopes for looser monetary policy. and on hopes that the U.S. and China will move closer to a trade agreement when the two leaders meet next week at the G20 summit.

U.S. crude oil futures gained 12 cents, or 0.2%, to $57.19 by 5:43 AM ET (9:43 GMT), while Brent oil traded up 33 cents, or 0.5%, to $64.78.

4. Global manufacturing strength shows mixed signs ahead of U.S. data

Global readings of manufacturing activity showed mixed signs in data released Friday as investors waited for the latest readings from the U.S.

Manufacturing activity in Japan underwent a third straight month of contraction.

Despite a continuing downturn in the euro zone’s manufacturing sector , the overall reading of business activity managed to reach a seven-month high . Still, the IHS Markit research showed that companies remained at their least optimistic levels in nearly five years due concerns over slowing global growth and the impact of trade conflicts.

Markets will have preliminary readings for June on both the U.S. manufacturing and services sectors when IHS Markit releases its data Friday at 9:45 AM ET (13:45 GMT). The more widely followed manufacturing report from the Institute of Supply Management will be released on Monday.

5. UnitedHealth buys Equian; Slack surges on debut

The parent of the largest U.S. health insurer, UnitedHealth (NYSE: UNH ), has agreed to buy health-care payments firm Equian for $3.2 billion, according to The Wall Street Journal. The deal would be the latest in a flurry of mergers and acquisitions in the sector this year that now tops $260 billion in deals, according to Dealogic.

Elsewhere, investors will be looking to see if messaging app Slack Technologies (NYSE: WORK ) can add to gains of nearly 50% that it made on its stock market debut Thursday. The share’s closing price valued the company at over $20 billion, underlining that the market still has a relatively high degree of tolerance for loss-making unicorn startups if the business model is compelling enough. Slack debuted through a direct listing, rather than a traditional IPO. As such, there are no underwriters to smooth out any potential volatility in the immediate aftermath of the listing.

— Reuters contributed to this report.

Best Binary Options Brokers 2020:
  • Binarium
    Binarium

    Best Binary Options Broker 2020!
    Good Choice for Beginners!
    Free Trading Education, Free Demo Account!
    Get a Sign-Up Bonus Now!

  • Binomo
    Binomo

    2nd in our ranking!

Like this post? Please share to your friends:
How To Start Binary Options Trading 2020
Leave a Reply

;-) :| :x :twisted: :smile: :shock: :sad: :roll: :razz: :oops: :o :mrgreen: :lol: :idea: :grin: :evil: :cry: :cool: :arrow: :???: :?: :!: