How to trade “risk-on” continuation in the currency market?

In this article, we will explain what currency pairs you can use to trade the stocks market continuation NZDJPY, CADCHF, OIL

Looking at the weekly DJIA chart, we can see that the US stock market Index is in the clear uptrend continuation after the strong bounce off the long-term uptrend line support 21000 level. An extension above the 25540 level is now opening widely “risk on” market environment and a test of 27000 level.

At the other part of the World, one more important “risk on” indicator, HANG-SENG China stock market Index, has completely reversed the strong downside correction from a 32500 high. This reversal has just begun so we could search for currency pairs that will help Forex traders to mirror the moves in the stock markets.

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One of the pairs that should be on your watch after the strong January reversal is the NZDJPY. On the weekly chart the pair is reversing from the 73.500-74 zone and is testing the 75.630 upside resistance level.

A daily close above this 75.630 upside resistance level is required for the opening of a strong 200 pips extension into the 78 level. By going long with 0.50 mini lot (50.000 units) at the current market levels, with the stop loss below the 75.100 level, you could have almost $1000 profit.

The other pair that could greatly benefit from a safe haven CHF weakening across the market is CADCHF. This pair is in the perfectly aligned uptrend channel and is on a brink of an upside break above the 0.7550 falling trend line resistance as it can be seen on the weekly chart.

By going long with 0.50 mini lot (50.000 units) at the current market levels, with the stop loss below the 0.7510 level, you could have almost $800 profit by targeting a 0.7700 level in the upside. 

The last but not the least is Oil. The instrument is breaking above the ascending triangle neckline 55 level. By going long with the 1 contract at the current market levels, with the stop loss below the 54.50 level, you could have almost $3500 profit by targeting a 58.30 upside resistance level. 

We have used the combination of the top-down trading analysis,  Elliott wave analysis and price action to get these key levels explained on the charts. We have chosen the best instruments by our risk/reward standards to get the advantage of the price action momentum and the market risk on the environment.

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