A1 Trading Company

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December 16, 2022

5 Strongest Pairs to Trade

Michael J. Donoghue
5 Strongest Pairs to Trade

As another dense news week draws to a close and financial markets continue to react to the latest flurry of interest rate hikes around the world, it can be helpful for traders to recenter on key biases. Before the weekend fully arrives, let’s check in with the EdgeFinder, A1 Trading’s market scanning software, to take note of the various ‘strong’ signals that have been generated in preparation for next week. The following list is composed of the 5 strongest pairs to trade according to EdgeFinder analysis: they are listed with their respective ratings, signals/biases, and corresponding charts. Additional fundamental and technical commentary will be provided accordingly.

1) USD/CAD - Earns an ‘8’ Rating, or a ‘Strong Buy’ Signal

5 Strongest Pairs to Trade
USD beats CAD in every listed category besides inflation (although annual inflation in the US remains slightly higher than in Canada).
5 Strongest Pairs to Trade
This yearlong uptrend has been impressive, with a sustained breakout above key resistance.

2) NZD/CAD - Earns a ‘6’ Rating, or a ‘Strong Buy’ Signal

5 Strongest Pairs to Trade
NZD beats CAD in every listed category besides inflation and interest rate divergence (although annual inflation in New Zealand remains higher than in Canada, and their benchmark interest rates are identical).
5 Strongest Pairs to Trade
The past few months have given way to incredible bullish momentum following October's reversal.

3) EUR/JPY - Earns a ‘6’ Rating, or a ‘Strong Buy’ Signal

5 Strongest Pairs to Trade
EUR beats JPY in every listed category besides inflation and unemployment; interest rate divergence is especially significant in light of the EU's departure from ultraloose monetary policy, which contrasts sharply with Japan.
5 Strongest Pairs to Trade
This yearslong uptrend has reached highs not encountered since 2015.

4) AUD/NZD - Earns a ‘-9’ Rating, or a ‘Strong Sell’ Signal

5 Strongest Pairs to Trade
NZD continues to beat AUD in every listed category.
5 Strongest Pairs to Trade
The aggressive selloff continues following October's stunning breakout below trendline support.

5) GBP/NZD - Earns a ‘-9’ Rating, or a ‘Strong Sell’ Signal

5 Strongest Pairs to Trade
NZD continues to beat GBP in every listed category.
5 Strongest Pairs to Trade
Trendline resistance spanning over a decade continues to hold as key support is yet again retested.

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