When a currency has a continued move in either direction traders with trading vision can be rewarded with huge gains. So lets examine two that have had significant rises in the past year. Will the trends continue? The Euro seems poised to break to the upside at least that is what the whales mouthpieces want us to believe.
First the EURO versus the US Dollar. 
After rising a staggering 13% between March and August 2017, it might just be time to book profit on the EUR/USD exchange rate rally.
Strategists at Credit Suisse are one notable player who reckon the Euro’s rally could be undermined – on the short-term at least – by the European Central Bank (ECB) meeting, on January 25.
“Our view has been to be long EURUSD structurally… but to look to take profits or at least scale back ahead of the ECB meeting on 25 January,” says Credit Suisse analyst Shahab Jalinoos.
Now the British pound Versus the US Dollar.
Pound Sterling is sitting pretty against the Dollar, Euro and host of currencies, but here is the rub for Sterling: the gains are thanks to weakness elsewhere.
The Pound-to-Euro exchange rate is back above 1.13 at the time of writing, hardly exciting news considering it has been stuck around here for weeks now.
Rather, the eye-catcher is the Pound-to-Dollar exchange rate which continues to record fresh multi-month highs that are taking it well into territory last seen during the infamous night of the EU referendum.
The advances against the Dollar are important as they reflect across other crosses, for instance, gains against the Canadian and Australian Dollars might have at least part of the GBP/USD advance to thank.
Indeed, much of the stubbornness in GBP/EUR also has GBP/USD to thank – after all, the Euro has been charging higher in 2018 yet Sterling manages to catch enough of a bid to stand ground.
But, there are risks in this whole dynamic as GBP/USD’s gains are seen by many to be largely a function of US Dollar weakness.
“The pound has been grabbing more of the headlines in recent days on account of some GBP specific gains. However, the move higher in GBP/USD is still largely a dollar depreciation story rather than a GBP positive story,” says Derek Halpenny at MUFG in London.
Hamish Muress, currency analyst at OFX agrees and believes recent movements are driven by Dollar weakness, which is a prevailing theme in the market at the moment.
Indeed, the USD Index, which measures the value of the dollar against a basket of currencies, was at a three-year low at the start of the week.
So what is a trader to do . We believe its best to avoid predictions Read the charts and follow the whales. To learn how SZNBT follows the whales we suggest our courses.
