Forex Pairs at the Big Figure

Forex Pairs at the Big Figure

When trading Forex, without paying attention to value (i.e. what is the significance of the actual numerical valuation of a pair), it can be a surprise when the pair stops being directional and becomes more of a seemingly volatile move. However while this volatility can characterise a trend end, it can also be a move which on examination is not volatility per se, but a pattern consequent on a big figure.

What this means is that as the pair gets to the big figure, it may power over it, but it may also (and perhaps more typically) trace out a pattern that really says this (if the market could talk): certain things need to be done to get over what may be a kind of cliff. So the pair has been scaling up through a big figure, perhaps (and perhaps typically) encountering resistance and retracements, including halfway between the big figure and then as it gets near the big figure, has a new landscape to scale, which results in 'volatile' moves.

What may be expected then ? Firstly, a retracement may have resulted earlier, around 3/4 way (i.e. around 75). But as it gets to 85/90, it may start encountering a different kind of resistance. But this resistance can be intermixed with increased momentum (creating in effect volatility). This is because 90+ has an uncertainty attached to it. It presents the possibility of getting to the big figure (even if there is an expectation that it may encounter resistance there) but it also carries with it the suggestion that the pair can become less directional. This said it is possible for a pair to power through the 90s and over the big figure, it depends on market conditions.

However it it also possible for the pair to move through the 90s, get over the big figure and then perhaps around 10 above, retrace back down, sometimes deep down, maybe bouncing at halfway between the big figure and rising again from here. Or it may move about on support and resistance under and above the big figure, before finally managing to move higher. It can also be important to notice what is the big figure itself, is it a kind of big big figure (i.e. it has significance itself), as this may be instrumental in causing retracements or adding powerful momentum.

For moves downwards to the big figure, it may not be the case that symmetry is preserved. That is, patterns on a move up and move down may differ. This is because there may be asymmetry in the market. Although there is no necessarily preferred direction for a currency (though it may ebb and flow into a preferred direction) there can be a difference in trading. However there can be symmetry as well, and the difference may be that a move down can have a connotation of a sharp reverse.

Moves down though can also mirror 85/90 with 15/10. There may be a slightly increased expectation that the pair will drop though the big figure as it gets to it, but it should be noted that 5 can present support (like 95 can present resistance on the way up), enabling a retracement or more. It may be expected that 85 can also provide resistance, resulting potentially, thought not necessarily in a bounce back up. And as before, 75 and 50 can provide support. For both moves up and moves down, the possibility of the big figure being firm resistance or support can be noted.

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