A glancing and prancing survey of the USD pairs on the daily charts suggests the are sharing the same price action DNA with all of them camping within 100pips of the 20EMA save one - the USDCAD.Â Now take a look at the numbers below;
434, 463, 442, 355, 395, 368, 900
These are the widths of the 2.5 Standard Deviation Bollinger Bands of all the USD pairs.Â Excluding the last one (USDCAD - which happens to be the only pair >100pips away from the 20EMA), all the other widths are around 400pips apart with the difference between the high and the low one being 108pips.Â With that little a variation between the USD bloc, combined with the fact all of them are stuck on the 20EMA and we have an environment that is really suitable for two types of trading;
a) hyper short term day tradingb) playing the wides range trading
Anything else will likely result in a fruitless attempt to grab a direction on pairs that have rudder-less ships guided by the west winds absent from the leather bag Odysseus needed to help him return home.Â This is highlighted nicely by an article today on Bloomberg talking about how many of the top Currency funds are down for the year on the lack of direction in the markets as of late.
With that being said, if you prefer trading the USD and are looking for strength and consistency of movement, then the answer lies in the number 900, which is the width of the 2.5STD BB on the USDCAD.Â Its the only pair able to muster up the volume, volatility and clearest pattern/direction (up for now).Â However, that does not mean the other greenback pairs should be avoided.Â It simply means do not expect to get massive gains as these pairs are swimming between the bands bouncing from pillar to post without much of a direction for now.
Highlighting our earlier suggestion, play the wides or take hyper active short term trades.Â From there -
Rinse, Lather, Repeat