Until recently, just about any trader would have told you that the major currency pairs are the ones to stick to if you want to avoid high-risk volatility. Sadly, that advice has become more trouble than it’s worth since Brexit and Trump’s trade wars hit the media. So if the majors are too hot to handle right now, where can a trader make high leverage trades in 2019? Keep reading to see why XAG stands out from the crowd.
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There are four major currency pairs, but when we take a look on the charts and check the international news reports, we see a highly volatile pattern that is causing modestly funded traders to be fearful. Here’s a list of the so-called stable currencies.
The euro is facing a battle on two fronts now that Trump is pointing his trade war guns at Europe. Threats of US tariffs on airlines and automotive exports may be the start of a battle that will only lead to further volatility. Add to that Putin’s alleged funding of right-wing parties in an attempt to destabilize the EU. With pressure from east and west and the fears of a crumbling union, you’ve got major euro volatility that can spring up when you least expect it.
Then there’s sterling. Brexit is all over the news these days and GBP has become one of the most unpredictable currencies of the year. Internal indecision from the UK government. The recently announced resignation of the British Prime Minister. An uncertain future. Forecasting GBP with technical and fundamental analysis isn’t as clear cut as most traders would like.
America is the center of the free market, but things don’t look so good for the US economy. With student debt higher than ever before and housing debt reaching recession levels, USD holders are starting to feel nervous. The trade wars continue, which is not advantageous for the US, and Trump seems focused on burning whatever international bridges his predecessors managed to build. USD is suffering, and there’s nothing in the coming weeks and months that will change that.
Both JPY and CHF continue to hold their status as safe haven currencies, but trading them against the big three requires constant monitoring to avoid premature Stop Loss and Take Profit activations. So what trading option can you consider as an alternative in the meantime?
XAG trades against most majors, but if you’re looking to escape the political drama, consider AUD as an option. XAGAUD shows a downward trend since the February high of 22.518, falling to the recent lows of 20.700. While this sounds like a lot, at no point in the last two months have the price swings exceeded 1.000. And with an almost mechanical and weekly high and low, silver offers a more stable option compared to the majors.
So you have stable patterns on the XAGAUD price charts and nothing fundamental on the horizon that could throw a spanner in the works and send prices off rhythm. The Aussies have avoided getting directly involved in the numerous international disputes so far. Moreover, they don’t have any major internal issues to resolve in the coming months. This means technical analysis might perform well in the absence of fundamental influences, making profit goals and Stop Loss settings relatively easy to forecast.
As always, FX News recommends that all traders do their own research and then compare their results against multiple indicators. When all sources of information are in harmony, then you can feel confident that your trade will end well. But don’t get overconfident! XAGAUD is an excellent trading opportunity right now, but the trading world is always fluctuating, and silver’s stability won’t last forever.
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