Which Forex Pair Ranges the Most

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<p><strong>Everyone</strong> who <strong>looks</strong> at a Forex <strong>chart</strong> spanning <strong>longer periods</strong>, like <strong>the D1</strong>, notices two common features, which is <strong>price </strong>action either <strong>moves</strong> generally in <strong>one direction</strong>, known as <strong>trending</strong>, or <strong>bounces</strong> between <strong>two</strong> well-established <strong>levels</strong>, <strong>support</strong>, and <strong>resistance</strong>, known as <strong>ranging</strong>.</p>
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<p><strong>Knowing</strong> if a Forex <strong>pair</strong> is <strong>trending</strong> or <strong>ranging</strong> is <strong>crucial</strong> to the <strong>success</strong> of profitable Forex <strong>traders</strong>, as <strong>each</strong> market <strong>condition</strong> requires a <strong>different strategy</strong> and suggests which trading methodologies to best avoid.</p>
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<p>A ‘<strong>range’</strong> in <strong>Forex</strong> trading <strong>refers</strong> to a <strong>horizontal </strong><strong>price </strong>channel a pair might establish.</p>
<p>The <strong>support</strong> level is the <strong>lower </strong>boundary of the <strong>range</strong> from <strong>where price </strong>action may typically <strong>reverse higher</strong>, and the <strong>resistance</strong> level is the <strong>upper</strong> boundary of the <strong>range</strong>, which could reject further higher movement of price. While a Forex <strong>trading range </strong>can <strong>materialize</strong> on <strong>any timeframe</strong>, using <strong>longer</strong> ones, like the H4 or D1, <strong>usually yields </strong>more <strong>accurate</strong> results.</p>
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<p><strong>Traders</strong> can <strong>use</strong> a Forex <strong>chart</strong> to help them <strong>identify</strong> a potential trading <strong>range</strong>. Connecting clear timeframe <strong>highs and lows </strong>with a horizontal line <strong>can define </strong>the <strong>establishment</strong> of a trading <strong>range</strong>, and it typically requires at <strong>least three </strong>datapoint <strong>confirmations</strong> to form <strong>valid </strong>support and resistance <strong>levels</strong>.</p>
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<p>Most <strong>trader</strong>s will <strong>buy</strong> once price level reaches the <strong>support level </strong>and consequently <strong>sell</strong> at <strong>resistance</strong>, but they should <strong>consider</strong> potential for range <strong>breakouts</strong> and breakdowns, including ‘false’ ones.</p>
<p><strong>Some</strong> Forex traders may <strong>prefer</strong> to draw a <strong>third line </strong>in the <strong>middle</strong> of the <strong>range</strong> and use a <strong>breakout above </strong>this level as a <strong>buying opportunity </strong>and a breakdown <strong>below</strong> it as a <strong>sell signal</strong>. However, traders should realize that a trading <strong>range</strong> does <strong>not </strong>in itself <strong>present </strong>an <strong>automatic</strong> trading <strong>signal</strong> but serves as another indicator for <strong>which</strong> trading <strong>strategy</strong> to use, to be considered alongside other<strong> aspects </strong>of technical <strong>analysis</strong>.</p>
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<p><strong>Any</strong> Forex <strong>pair</strong> can <strong>form</strong> a trading <strong>range</strong>, but <strong>some </strong>pairs historically tend to <strong>range more </strong>than they trend, and they often establish <strong>well-defined </strong>support and resistance <strong>zones</strong>. Currency crosses, often those <strong>without</strong> the <strong>US Dollar </strong>as a quote or base currency, tend to be the <strong>more reliable </strong>currency pairs for <strong>traders</strong> who <strong>seek range-</strong>trading <strong>opportunities</strong>.</p>
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<p><strong>Here are the Forex pairs which are widely considered best for range trading:</strong></p>
<p><strong><u>EUR/CHF</u></strong> – The EUR/CHF was the <strong>best range </strong>trading <strong>instrument</strong> until 2015 when the <strong>Swiss National Bank de-pegged </strong>the Swiss <strong>Franc</strong> from the <strong>Euro.</strong> The EUR/CHF still <strong>ranks</strong> amongst the <strong>best range </strong>trading Forex <strong>pairs</strong>, as the Swiss and the Eurozone <strong>economies</strong> share many <strong>similarities</strong>, like a conservative <strong>fiscal approach </strong>and trade and <strong>budget surpluses</strong>. The Swiss <strong>Franc</strong> is also considered a classic <strong>safe-haven asset </strong>and indirect commodity <strong>currency</strong>, which adds to its <strong>appeal</strong> for traders seeking <strong>breakout</strong> when there is a global ‘<strong>risk off’ </strong>environment when <strong>markets</strong> are <strong>fearful</strong>.</p>
<p><strong><u>EUR/GBP</u></strong> – The <strong>EUR/GBP</strong> offers higher <strong>liquidity</strong> and <strong>ranges more</strong> than it <strong>trends</strong>, <strong>despite</strong> the post-<strong>Brexit</strong> fallout. The <strong>UK</strong> is home to the most <strong>dominant</strong> Forex <strong>market</strong>, accounting for the <strong>bulk</strong> of daily <strong>transactions,</strong> and both regions are <strong>core</strong> trading <strong>partners</strong> for each other with an often-similar approach to <strong>monetary policy</strong>.</p>
<p><strong><u>AUD/NZD</u></strong> – The AUD/NZD <strong>emerged</strong> as the <strong>leading</strong> <strong>range-bound </strong>currency <strong>pair</strong>. Both <strong>economies</strong> are heavily <strong>intertwined</strong> and are <strong>commodity exporters </strong>but do not compete for the same commodities. This currency <strong>pair</strong> establishes <strong>clear</strong> trading <strong>ranges</strong>, making it <strong>ideal</strong> for beginners and seasoned traders due to its comparative <strong>low volatility</strong>.</p>
<p><strong><u>AUD/CAD</u></strong> – The <strong>AUD/CAD</strong> pitches <strong>two</strong> commodity <strong>exporters</strong> against each other, and while Australia and Canada export different commodities, both are known as <strong>hard commodity</strong> exporters, those <strong>mined</strong> or <strong>extracted</strong>, and commodity prices are the third variable in this currency pair. <strong>Commodities</strong> remain <strong>priced</strong> in <strong>US Dollars</strong>, and the bulk of contracts are settled in US Dollars, adding an interesting <strong>fourth variable</strong> for range traders to evaluate.</p>
<p><strong><u>NZD/CAD</u></strong> – The <strong>NZD/CAD</strong> is <strong>like</strong> <strong>the AUD/CAD</strong>, but New Zealand exports soft commodities, those raised and harvested, which offers a different commodity twist.</p>
<p><strong><u>USD/JPY</u></strong> – The USD/JPY is <strong>one exception</strong> to the <strong>currency cross rule</strong>. Both <strong>currencies</strong> are seen as a <strong>safe-havens</strong> and historically this pair has been the primary currency pair for <strong>carry trading</strong> due to the <strong>interest rate</strong> differential <strong>between</strong> them, <strong>JPY</strong> having constantly <strong>lower</strong> central bank <strong>base rates</strong> than USD, which can <strong>lead</strong> to well-established <strong>ranges</strong> being formed to take advantage of.</p>
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<p><strong>Determining</strong> whether a currency <strong>pair</strong> is <strong>trending</strong> or <strong>ranging </strong>is one of the most <strong>fundamental</strong> aspects of <strong>trading</strong> Forex <strong>profitably</strong>.</p>
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<p>Forex traders can <strong>use appropriate strategies </strong>and define risk management profiles <strong>depending</strong> on underlying <strong>market conditions</strong>. The <strong>best</strong> Forex pairs for range trading are <strong>currency crosses</strong>, which typically <strong>exclude</strong> the <strong>US Dollar</strong>. The <strong>EUR/CHF </strong>and the <strong>AUD/NZD </strong>are the two <strong>leading</strong> currency <strong>pairs </strong>for range-bound markets, but traders can use technical analysis alongside geopolitical events to identify others.</p>
<p><strong>Which Forex pairs range the most?</strong></p>
<p>While all Forex pairs can enter a trading range, among the most typically range-bound currency pairs are currency crosses, those without the US Dollar as a quote or base currency. The EUR/CHF, EUR/GBP, AUD/NZD, AUD/CAD, NZD/CAD, and USD/JPY, which is a major currency pair and an exception, tend to range more than they trend, placing them among the favorite Forex pairs for range-bound Forex trading strategies.</p>
<p><strong>What is the most ranging Forex pair?</strong></p>
<p>The EUR/CHF is the most ranging Forex pair, followed by the AUD/NZD. While the lower bound range of the EUR/CHF range remained fixed until 2015, since the Swiss National Bank depegged the Swiss Franc from the Euro, the dynamic shifted, and the AUD/NZD became the go-to currency pair for range traders.</p>
<p><strong>What is range bound in Forex trading?</strong></p>
<p>Range bound in Forex refers to a currency pair trading between well-established support and resistance levels, the lower and the upper bound range. Forex traders can identify it by drawing support and resistance levels on their Forex charts, and price action bounces between them.</p>
<p><strong>Which pairs work best in a ranging market?</strong></p>
<p>Currency crosses work best, as they are less actively traded and do not include the US Dollar. The EUR/CHF and the AUD/NZD remain the primary currency pairs for traders seeking opportunities in a range-bound Forex market.</p>
<p><strong>What is the lower bound of a range?</strong></p>
<p>The lower bound of a range refers to the support level. Each trading range requires two price points established by price action. The top-end is the upper bound range, or resistance, while the lower bound equal’s support.</p>
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