A1 Trading Company

Ticker tape by TradingView
Best Currency to Buy?

As the fiscal year comes to a close, consumers will likely finish shopping for the holidays, and traders and investors will get some respite thanks to a long weekend due to bank holidays around the world. While concerns about further stock market selloffs may be lingering in the minds of some, a promising set of assets is likely flying under most retail traders’ radar: Kiwi Dollar pairs. NZD has retained incredible strength in recent months, owed primarily to a remarkable New Zealand economy and a hawkish central bank; despite few bits of recent or upcoming news that could become fundamental catalysts, the New Zealand Dollar remains highly esteemed by the EdgeFinder. As we consider trade setups for the near future, it is worth asking: could NZD currently be the best currency to buy?

Three Pairs to Watch

According to the EdgeFinder, which provides nuanced supplemental analysis for traders, some of the pairs that earn the strongest biases are still NZD pairs. For those who are bullish on the Kiwi Dollar and interested in finding potential trade setups, the following pairs are well worth monitoring. They are listed below in order of signal strength, along with their respective ratings, signals/biases, and corresponding charts.

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

Best Currency to Buy?
Best Currency to Buy?

2) AUD/NZD - Earns an ‘-8’ Rating, or a ‘Strong Sell’ Signal

Best Currency to Buy?
Best Currency to Buy?

3) NZD/CAD - Earns an ‘5’ Rating, or a ‘Buy’ Signal

Best Currency to Buy?
Best Currency to Buy?
3 Pairs to Avoid (For Now)

As many readers are aware, the EdgeFinder, A1 Trading’s market scanner, can be incredibly helpful in the process of discerning which assets are worth watching for potential trade setups. Whether someone is planning on buying or selling currency pairs, commodities, indices, or more, EdgeFinder analysis is so holistic that its ratings and biases can be a go-to supplement for bulls and bears. However, one feature of the EdgeFinder’s that is rarely mentioned, yet quite meaningful, is its generation of ‘0’ ratings and ‘Neutral’ biases. Most days, there is a small handful of assets that earn these reviews; rather than being irrelevant, these ratings can be quite beneficial to keep in mind, as they alert traders to a high level of uncertainty. With that in mind, here are 3 pairs to avoid (for now), as they currently earn such ‘0’ ratings, warranting caution.

1) AUD/CAD - Earns a ‘0’ Rating, or a ‘Neutral’ Signal

3 Pairs to Avoid (For Now)
Both currencies display some substantial degree of weakness relative to other currencies' host countries, such as Australia's unaggressive central bank, or the Canadian Dollar's relationship with (recently falling) oil prices as a 'commodity currency'.

2) NZD/USD - Earns a ‘0’ Rating, or a ‘Neutral’ Signal

3 Pairs to Avoid (For Now)
Both currencies display some substantial degree of strength relative to other currencies' host countries, with both boasting solid GDP growth and fairly hawkish central banks.

3) GBP/CAD - Earns a ‘0’ Rating, or a ‘Neutral’ Signal

3 Pairs to Avoid (For Now)
As with AUD/CAD, both currencies here suffer from some substantial degree of weakness relative to other currencies' host countries, such as the UK's looming stagflation problem (recession combined with high inflation), and institutional bearishness for both the Pound and Canadian Dollar.
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.
Warning: US CPI Tomorrow

Tomorrow morning at 8:30 am ET, the United States Bureau of Labor Statistics is scheduled to release the latest Consumer Price Index (CPI) data for the month of November. Widely considered a proxy for inflation, the rate at which CPI increases will help the American public and the Federal Reserve discern how much of a threat high inflation continues to pose. Month-over-month CPI is forecast to slow to a 0.3% increase, while month-over-month Core CPI (which excludes volatile food and energy prices) is anticipated to clock in at 0.3% as well. If the real numbers exceed these expectations, this would be bullish news for USD and bearish news for stock market indices, whereas the inverse would be true if the numbers come in smaller. This is because hotter inflation data gives the Fed further incentive to raise interest rates to cool the economy, which strengthens the Greenback while diminishing demand for stocks. With the Fed’s next rate hike and press conference coming just two days from now, we must issue a warning: US CPI tomorrow is just the beginning for major pairs and equities.

Three Pairs to Watch

Considering that the latest Producer Price Index data released last week was quite bullish for USD, it seems plausible that tomorrow's CPI updates could yield similar results. With this in mind, for those interested in going long on USD, here are three potential pairs to watch for trade setups. While the EdgeFinder, A1 Trading’s handy market scanner, is reasonably cautious about some of them, new momentum from a fundamental catalyst could correlate with new biases being generated which are more optimistic for US Dollar bulls. They are listed below with their respective ratings, signals/biases, and corresponding charts.

1) USD/CAD - Earns a ‘6’ Rating, or a ‘Strong Buy’ Signal

Warning: US CPI Tomorrow
Warning: US CPI Tomorrow

2) USD/JPY - Earns a ‘1’ Rating, or a ‘Neutral’ Signal

Warning: US CPI Tomorrow
Warning: US CPI Tomorrow

3) AUD/USD - Earns a ‘-1’ Rating, or a ‘Neutral’ Signal

Warning: US CPI Tomorrow
Warning: US CPI Tomorrow
Time to Buy CHF

As the Swiss National Bank (SNB) gears up for a likely new interest rate hike on Thursday, December 15th, financial markets will be watching. Chairman Thomas Jordan of the SNB has made these hawkish intentions clear repeatedly; this contractionary agenda would be the continuation of Switzerland’s recent departure from ultraloose monetary policy. Negative interest rates had been a years-long precedent for the central bank prior to the SNB’s shocking pivot towards tightening over the course of 2022, as high inflation grips the global economy. These rate hikes contribute to a greater valuation for the Swiss Franc, which already displays impressive fundamentals thanks to the stability of Switzerland’s economy. This reflects in the EdgeFinder’s positive analysis of the currency, which has aided in generating several new signals for CHF pairs; they are listed below with their respective ratings, signals/biases, and corresponding charts. As potential trade setups emerge over the coming week, it is worth asking: is it time to buy CHF?

1) CHF/JPY - Earns a ‘5’ Rating, or a ‘Buy’ Signal

Time to Buy CHF
Time to Buy CHF

2) AUD/CHF - Earns a ‘-4’ Rating, or a ‘Sell’ Signal

Time to Buy CHF
Time to Buy CHF

3) CAD/CHF - Earns a ‘-4’ Rating, or a ‘Sell’ Signal

Time to Buy CHF
Time to Buy CHF
Best Pairs to Sell This Week

As we await significant economic news releases over the coming days (such as Australia’s quarter-over-quarter GDP growth tonight at 7:30 pm ET, an interest rate hike and corresponding statement from the Bank of Canada on Wednesday at 10 am ET, and the latest Producer Price Index numbers for the US on Friday at 8:30 am ET), it is worthwhile to consider which pairs the A1 Edgefinder already suggests monitoring. With this in mind, here are the EdgeFinder’s three potential best pairs to sell this week, listed below with their respective ratings, signals/biases, and corresponding charts. Due to the New Zealand Dollar’s holistic strength as of late, they are currently all NZD pairs. Additional comments on fundamentals and technical analysis will also be provided.

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

Best Pairs to Sell This Week
NZD beats the Pound in every listed category, perhaps most notably in interest rate divergence, COT data, and GDP growth.
Best Pairs to Sell This Week
Trendline resistance is remarkable, spanning nearly two decades. Key support has been tested repeatedly since 2018, thus far to no avail.

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

Best Pairs to Sell This Week
NZD likewise beats the Aussie Dollar in every listed category, with the same strong points mentioned with GBP/NZD.
Best Pairs to Sell This Week
This past year's impressive uptrend has been disrupted by an aggressive breakout to the downside, aided by EMA resistance.

3) EUR/NZD - Earns a ‘-6’ Rating, or a ‘Strong Sell’ Signal

Best Pairs to Sell This Week
NZD beats the Euro in every listed category, except for both COT data and retail sentiment.
Best Pairs to Sell This Week
Trendline resistance appears compelling, though higher lows are also evident since April of this year.
Kiwi Dollar Spike Tomorrow

While today is relatively uneventful in terms of major economic news around the world, this will not be the case for long. There is a chance that the forex market could witness a Kiwi Dollar spike tomorrow due to the Reserve Bank of New Zealand (RBNZ) announcing their latest interest rate hike at 8 pm ET. With market forecasts currently expecting the Official Cash Rate to increase by 75 basis points, hitting 4.25% (surpassing the United States’ Federal Funds Rate), all eyes will be on NZD to see if it retains its bullish momentum. With the RBNZ set to issue a Monetary Policy Statement in conjunction with their rate hike, and a press conference to follow an hour later at 9 pm ET, how the markets interpret the RBNZ’s commentary will help decide the fate of the New Zealand Dollar.

Three Pairs to Watch

The EdgeFinder, A1 Trading’s market scanner, currently holds NZD in high esteem: all the pairs with the strongest buy and sell signals are NZD pairs, with biases that corroborate Kiwi Dollar bullishness. Three of these pairs are listed below with their respective ratings, biases, and corresponding charts.

1) GBP/NZD - Receives a ‘-9’ Rating, or a ‘Strong Sell’ Signal

Kiwi Dollar Spike Tomorrow
Every line item in the Score Summary list favors NZD over GBP, factoring in fundamental, technical, and sentiment analysis.
Kiwi Dollar Spike Tomorrow
This monumental downtrend is years in the making.

2) AUD/NZD - Receives a ‘-9’ Rating, or a ‘Strong Sell’ Signal

Kiwi Dollar Spike Tomorrow
Every line item in the Score Summary list favors NZD over AUD, factoring in fundamental, technical, and sentiment analysis.
Kiwi Dollar Spike Tomorrow
October's huge breakout to the downside of trendline support has given way to an aggressive new downtrend.

3) NZD/JPY - Receives a ‘5’ Rating, or a ‘Buy’ Signal

Kiwi Dollar Spike Tomorrow
Although NZD beats JPY in a number of key categories, perhaps the most crucial is interest rate divergence, as the RBNZ and the Bank of Japan engage in starkly different projects in terms of monetary policy.
Kiwi Dollar Spike Tomorrow
This uptrend has held strong for over two years now.
3 Strongest Pairs to Buy

As we wait for major economic news releases this week (such as monetary policy meeting minutes from the Reserve Bank of Australia tonight at 7:30 pm ET, United States Producer Price Index numbers tomorrow at 8:30 am ET, and Consumer Price Index updates from the UK on Wednesday at 2 am ET), it can be helpful to consider what pairs the Edgefinder already signals to be particularly worth watching. With this in mind, here are the EdgeFinder’s current 3 strongest pairs to buy this week, listed below with their respective ratings, signals/biases, and corresponding charts. Additional comments on fundamentals and technical analysis will also be provided.

1) CHF/JPY (Receives a 5, or ‘Buy’ Signal)

3 Strongest Pairs to Buy
Despite the similarities between these two countries' economies in terms of stability and hot labor markets, the Swiss National Bank's willingness to raise interest rates is decidedly bullish for CHF, while the Bank of Japan instead continues to keep its monetary policy 'ultraloose'.
3 Strongest Pairs to Buy
While the uptrend has paused, strong support has been found around the 146 level.

2) USD/CAD (Receives a 5, or ‘Buy’ Signal)

3 Strongest Pairs to Buy
The US economy notably outpaces Canada's in terms of labor market activity, economic growth, inflation, and central bank aggression.
3 Strongest Pairs to Buy
Despite the steep fall over the past month, price action is encountering a key support zone; Keltner Channel walls suggest oversold conditions.

3) NZD/CAD (Receives a 4, or ‘Buy’ Signal)

3 Strongest Pairs to Buy
Despite the Reserve Bank of New Zealand lagging behind the Bank of Canada regarding interest rate divergence, this may not last long, considering New Zealand is currently leading in terms of holistic overheating.
3 Strongest Pairs
It appears a significant breakout to the upside may have just occurred within the past week, disrupting a year-long downtrend.
Caution: US Midterm Elections Tonight

For those trading stocks or the US Dollar this week, we would like to encourage caution: US midterm elections tonight may become fundamental catalysts, creating volatility across markets. With hundreds of millions of potential voters going to the polls across the United States today to decide who they want to represent them in government, these decisions will ostensibly have significant impacts on financial market activity, especially with federal elections. With Democrats projected to lose their current majority in the House of Representatives and a slew of close races to determine a new Senate majority locked in a dead heat, the policy-making landscape in the US could be quite different in January 2023, when those newly elected take office.

What Impacts Might This Have?

If Democrats manage to beat expectations and keep both chambers of Congress, even adding to their current majorities, this will likely pave the way for more federal spending packages over the next two years, potentially adding to both GDP growth and inflation. On the other hand, if Republicans take one or both chambers, this could effectively nullify President Biden’s future agenda by preventing new spending packages from passing over the next two years, reducing potential GDP growth and inflation.

Thus, my personal guess is that a) a sweeping Democrat victory would create shorter-term stock rallies and longer-term USD bullishness (due to increased stimulus), and b) one or more chambers being won by Republicans would cause longer-term stock support and slight bearishness/neutrality for USD (due to increased austerity). However, this is only speculation; we will have to wait and see how the markets respond. This reaction may take some time to culminate, as some states take longer than others to tally votes and report election victories, meaning some results may not be known for days.

Two Potential Pairs to Watch

If you are bullish on USD and looking for potential trade setups as midterm results emerge, the following two pairs are currently rated favorably by the A1 EdgeFinder for those interested in going long on the Greenback. They are listed below with their respective ratings, signals/biases, and corresponding charts.

1) USD/JPY (Earns a 5, or ‘Buy’ Signal)

Caution: US Midterm Elections Tonight
Caution: US Midterm Elections Tonight

2) USD/CHF (Earns a 3, or ‘Buy’ Signal)

Caution: US Midterm Elections Tonight
Caution: US Midterm Elections Tonight
This Strong Currency May Surprise You

One of the main reasons why the EdgeFinder, A1 Trading’s market scanner, is so helpful is because of its ability to convey nuance when presenting analysis. For example, one currency pair may have strong bullish fundamentals while institutional sentiment somehow remains quite bearish, and the EdgeFinder is able to present this data concomitantly. This makes it even more compelling when the market scanner issues ‘strong’ buy or sell signals, indicating that a significant combination of fundamental, sentiment, and technical analysis have aligned for a pair. As of today, two new minor pairs have earned ‘strong sell’ signals; they share the same quote currency, and this strong currency may surprise you. It is the Kiwi Dollar, which has only recently been gaining bullish steam in the forex market. Boasting hot labor markets, strong GDP growth, high inflation, and a relatively hawkish central bank to match, New Zealand’s economy makes NZD seem quite promising. Institutional traders are only just now beginning to affirm this, with over 10% more of them going long on NZD than in the previous week.

Two Potential Pairs to Sell

The following two pairs are rated extremely favorably for bears, and for those planning to go long on NZD. They are listed below with their respective EdgeFinder ratings, signals/biases, and corresponding charts.

1) AUD/NZD (Earns a -9, or ‘Strong Sell’ Signal)

This Strong Currency May Surprise You
NZD currently beats AUD in every listed category.
This Strong Currency May Surprise You
October saw a steep breakout beneath key trendline support.

2) GBP/NZD (Earns a -9, or ‘Strong Sell’ Signal)

This Strong Currency May Surprise You
NZD currently beats GBP in every listed category.
This Strong Currency May Surprise You
This downtrend spans nearly two decades, as shown in the 1-Month timeframe above.
Home
Edgefinder
VIP
Menu
homesmartphonelaptopmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram