Hi, fellow fans of financial markets and trend analysis lovers. Today I wanted to stress the importance of following a leader principle. I have a special post on the topic and you will see the link at the end of the post. I mentioned that I expect Canadian dollar to strengthen and Japanese Yen to weaken. Yen has been weakening for some time against some currencies, but Canadian dollar not strengthening yet. As I looked through major pairs today, I saw that a much better candidate for going short Euro is not eur/cad, but eur/aud. Why is that?
EUR/CAD is still kissing the resistance and going nowhere, while eur/aud managed to break its’ support and is bellow it now. Looking at other Euro pairs you see that aussie is the strongest at the moment and managed to take power over Euro first. It means the pair might be the leader in a bearish move, which is going to be against Euro. One has to place the biggest bets on the leader. The same pattern can be seen in Japanese Yen pairs. Australian dollar is the strongest among them.
In fact, Yen is still pretty strong against most currencies, or in the same manner as Canadian dollar, not going anywhere yet. But aud/jpy is strengthening and eur/aud is weakening. Does it say anything to you about the leader in forex market. Yes, you guessed right, the biggest winner will probably be aussie. I think it is wise to be with winner and avoid losers. These are only my predictions. You have to make your own and rely on your own reasoning. But never forget that the principle I am discussing right now is very important. Hope you see that.
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Disclaimer
Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.