Finding the most predictable pair of currency for forex trading usually turns out to be greatest challenge for newbie forex investors. Most of them rely on the most popular pair of currencies like EUR with USD and GBP with USD. These popular pairs are good choice but not good enough when compared to some of the other pairs and even these popular pairs would not necessarily always be able to generate perceived outcomes. According to many experienced forex investors Australian Dollar with US Dollar constitutes a reputable currency pair. Through analyzing different indicators you will see that there is a vast majority of experienced investors who choose ASD and USD as the most predictable pair of currency for their forex trading.
The pair of British Pound with Euro is considered to be the most popular pair of currency therefore many new as well as existing investors start forex trading with these currency pair. The reason that why investors start trading these pairs is that they hear a lot about them from the brokers in forex market who offer minimal spread on such currency pairs. Most of the online and web based reviews also propagate these currency pairs. Too much popularity can be a source of confusion for the investors, because they will fail to analyze other potential pairs of currencies and ultimately they will not succeed in forex market.
On the basis of my experience and observation, I would rank the pair of Australian Dollar and US Dollar on peak of most predictable pair of currency’s list. I have drawn this conclusion on the basis of my experience and observation about the forex market and on the basis of reviewing the priority of successful forex traders. In my list Euro and British Pound secured second position. It is a matter of common fact that one of the characteristics of most predictable pair of currency is that the most predictable pairs in comparison to other pairs usually follow the rules prescribed by technical analysis. It has been observed that almost 91% of those who trade in Australian Dollar and US Dollar pair and have attained long position often secure winning position. Such a huge success rate i.e. 91% is enough to conclude that this pair of currencies is very reliable as well as predictable.
Though British Pound is highly volatile still the currency pair of British Pound and Euro has achieved second position in my list, because of the fact that the behavior of this pair has improved significantly. This pair exhibits wider moves as well as wider stops but the pair is comparatively less wide than other pairs that are less predictable. Other popular pairs like Euro with US Dollar (Euro/USD) and British Pound with US Dollar (GBP/USD) execute unexpected fluctuations and moves therefore they are less predictable as compare to the currency pair of AUD/USD and GBP/Euro. The reason that most popular pairs like EUR/USD fail to attain reputable position when it comes to their predictability is that they are vulnerably affected by recent rise in the debt crisis.
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The predictable pairs of currency are important to know. Traders usually want to identify such pairs of currency that can generate expected outcomes. Many pairs of currency follow the rules of technical analysis whereas some pairs do not follow any rigid rules. In terms of prediction all the pairs of currency cannot be predicted accurately and equally. There are some pairs of currencies that can easily be predicted whereas some pairs are hard to predict. The prediction about the possible fluctuation in the pair of currency enables traders to identify the clear resistance and support line and the ability of pair to bounce back.
Majority of the trader’s trade is on the basis of their perception and on the basis of perceived popularity of currency pairs. The popularity of some of the currency pairs force investors to invest on those currencies, therefore in the end traders may end up failing. Whereas there are some currency pairs that are not so much popular but it has been observed that majority of investors who invest on such infamous pairs tend to be successful. Following is the list of some of the most predictable pairs of currencies;
• AUD/USD; The Australian Dollar with United States Dollar constitutes the most predictable pair of currencies. This pair can face fluctuations but most of the times fluctuations in this pair are already predicted therefore investors are not harmed. The pair of Australian Dollar and US Dollar tends to respect the old and existing trading average line. They usually do not deviate considerably from their mean. It has been noticed that almost 90% of investors who invest in this currency pair enjoy favorable outcomes.
• EUR/GBP; On the basis of reviews from expert traders and on the basis of general observation the pair of Euro with British Pound attains second position in the list of most predictable pairs of currency. It is generally perceived that this pair has tendency to quickly attain a consistent trading position. This pair in contrast to less predictable pairs of currency follows defined rules and regulations described by technical analysis.
• USD/CHF; The pair of US Dollar and Swiss Franc (CHF) has secured third position in the list of most predictable pairs of currency. Though this currency pair is intervened by SNB but still this pair respects average trading lines. The possible fluctuation of this currency pair can be traced by analyzing very simple market trends. There are certain preliminary causes that can forecast the possible fluctuation in this currency pair.
• EUR/CAD; The pair of Euro and Canadian Dollar has attained fourth position in the list of most predictable pairs of currency. Though it does not successfully observes the trading average lines but still due to the tendency of determining cross moves this pair is ranked as one of the most predictable pairs of currency.
• GBP/USD; The pair of British Pound and US Dollar constitutes another predictable pair of currency. This pair is very popular amongst traders due to the fact that heavy investments are made on this pair.