Sticky Currency Pairs explained
More than likely you have never heard of this terminology "
Understanding the individual characteristics of each currency pair will be crucial for your trading success. Taking trades on technical levels but not understanding the currency pairs personality is a big mistake. Much like people, currency pair characteristics do not
EURUSD & GBPUSD
Both the EURUSD and GBPUSD pairs respond well off key levels if the overall drivers of price are one directional. Let us assume that the market was very bullish the US dollar. We will still see these two pairs respond
Naturally this will not always be the case, especially if the market is making major adjustments such as a flight to safety or risk because of political situations or central bank talk. By understanding the market as we often discuss, you will identify these events.
Our preferred trading environment is when price is range bound and staying within or near its average true range.
Sticky AUD and NZD
When these two pairs
Unlike the EUR and GBP, both AUD and NZD have a much smaller daily range. AUDUSD can still
Let's get sticky
Sticky is best explained by saying that when price is trading in a direction either up or down, the response off key levels
Below is a NZDUSD 60-minute chart. I circle the important
Described is a very common characteristic seen on both AUD and NZD. You need to be careful when looking for a response from these pairs. Try to trade each of these at their extreme level for each day, when the Average True Range has
We cannot explain and give you the entire structure of this sticky event situation, but hopefully this will give you some awareness to the behavior. Much of the trading approach we teach you is about price action; however deeper component of price action is price characteristics as we are discussing within the article.
Happy Trading, Steve.