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Currency Pairs are either Trending or Ranging

Currency Pairs are either Trending or Ranging

Richard Krivo, Trading Instructor

Student’s Question:I have heard that currency pairs are either ranging or trending. How does that look on a chart? Thanks.Instructor’s Response:Good question…After a currency pair has a trending move, it will generally “bounce around” testing a support level after a down trend or testing a resistance level after an uptrend. If the level in question holds, the price action can then begin a trending move in the opposite direction.Take a look at the historical chart of the USDCHF below…Initially we see the downtrend and we notice that it come to a halt at around the 1.1875 support level on this chart. It trades in range of about a 100 pips, tests support again and then begins a bullish trend to the upside.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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