Edge-Forex Forex

Forex Trading Market Trends and Opportunities for 2022. Continued

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Is the SNB going to intervene again in the EUR/CHF market? 

This brings us to the EUR/CHF performance. Throughout 2021, this duo has been under siege. More specifically, from March to the present market price, the exchange rate has lost almost 7% of its value. The EUR/CHF is trading at 1.0420 at the end of December. 

The negative momentum has been bolstered mostly by a strong Swiss franc. The Swiss franc’s rise is most likely the consequence of traders seeking protection in an uncertain market environment. With the Covid-19 outbreak, rising inflation predictions, and supply-chain disruptions, the franc is viewed as a currency safe haven. 

As we approach 2022, the Swiss franc’s advances may go against the Swiss National Bank’s expectations (SNB). The Swiss central bank has already stated that an overpriced franc will not be tolerated. To address this, it has intervened in financial markets multiple times in an attempt to devalue the franc. 

In this scenario, keep an eye out for SNB pronouncements in 2022 to see if central bankers want to enter the market. 

GBP/USD: A Surprising Rate Increase Sends the Pound Soaring Higher 

Moving on to the FX markets, another interesting pair to keep an eye on is the GBP/USD. When the Bank of England unexpectedly raised interest rates in mid-December, the British pound enjoyed a substantial lift. 

In additional depth, the GBP/USD reached a high above 1.3400 in December. Prior to the statement by the BoE, the pair was trading near 1.3160, a one-year low. 

Nonetheless, the exchange rate is down by around 3% year on year due to traders’ preference for the US dollar. As a result, the pound may receive more attention in 2022, with players hoping to profit from rising interest rates. It’s also worth noting that the GBP/USD hit a 2021 high of 1.4250, a level not seen since early 2018. 

USD/JPY: A Forex Winner with a Gain of More Than 11% in 2021 

The USD/JPY pair will undoubtedly be on many traders’ radars. Throughout 2021, the fluctuating exchange rate increased dramatically. In practise, the USD/JPY has been on an unbroken uptrend from the first trading day of the year. 

With a few minor setbacks or corrections, the USD/JPY has a yearly gain of roughly 11%. As a result, the currency pair will be one of the largest winners in terms of percentage gains in 2021. 

Furthermore, on November 25, the USD/JPY reached a five-year high above 115.50. The significant improvements, however, quickly faded when the Omicron variation was identified the next day. As a result, the USD/JPY fell more than 2% in a single session. Having said that, the exchange rate has yet to regain its losses and is expected to end the year hovering around 114.50. 

Nonetheless, given the year’s gains, traders may anticipate the USD/JPY pair to retreat from multi-year highs. 

Traders are optimistic about new opportunities in 2022. 

In this environment, forex traders are looking forward to increased trading chances in 2022. To that end, keep a watch on the aforementioned pairings to ensure you don’t miss out on an opportunity to enter the market. 

It’s vital to remember that market movers and shakers can occur in a moment and shift the direction of any currency pair. Keeping this in mind, remain up to speed on market news, trends, and updates to stay ahead of the game.

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