There are many times throughout the year when the EURX and USDX are range bound. During these periods it can be difficult to find trend trades on the indices and many FX pairs. At such times though the Cross pairs often deliver decent trading opportunities during the London and or US trading sessions. The purpose of this article is to show some examples of this trading approach.
The lead up to March 18th 2015 has been a pensive one for the US$ as the markets are looking for guidance from a keenly awaited FOMC meeting about when US interest rates might start to rise. The USDX and EURX have both been range bound in various triangle patterns in the lead up to this news:
USDX 4hr: range bound ahead of an important FOMC meeting:
EURX 4hr: also range bound:
Conventional FX pairs often chop sideways along with the FX indices during times like this. For example, the EUR/USD and USD/CAD are two pairs that have been rather choppy in the lead up to this FOMC meeting:
EUR/USD 15 min: this 15 min chart shows how choppy price action had been on the EUR/USD over the last few sessions. Even though price chopped a bit higher during the London session the ADX momentum indicator didn’t really engage here at all:
The USD/CAD 15 min chart also shows choppy price action during this period. Note the ADX indicator down the bottom of the chart and how the black ADX line rarely engaged above 20:
However, some of the Cross pairs gave decent tend trading opportunities during the same time period:
EUR/NZD 15 min: this cross pair though gave a decent 15 min chart trading opportunity during the previous London / US session. Note how the ADX engaged cleanly and decisively in this trend:
GBP/AUD 15 min: this pair also gave a great 100 pip move starting during the most recent London session:
Summary: Consider the Cross pairs for shorter term trend trading opportunities during the London and US session when the USDX and EURX indices are range bound.
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