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Foreign Exchange

Technical-based FX trading strategies most profitable, reveals Bloomberg survey

The best returns during the next 12 months will be generated using technical analysis strategies, according to a survey at Bloomberg’s FX summit.

Around 38% of the 114 foreign-exchange professionals surveyed at Bloomberg’s fourth and largest FX summit in New York said they expected technical strategies to generate the highest returns during the next 12 months.

Some 25% said momentum-based strategies would be most profitable, whilst fundamental and carry trading strategies were favoured by 22% and 15% of respondents respectively.

"We were surprised to see that FX executives are favouring technical analysis now, as carry trades have netted the best results over the last 10 to 15 years," says Tod Van Name, global head of foreign exchange and economics at Bloomberg.

"While market volatility and carry trades are incompatible in the short run, it will be interesting to see how well technical analysis will perform amid sharp moves introduced by government intervention."

The poll results, released on Wednesday, were taken at the Bloomberg's FX11 Summit, which gathered more than 270 bankers, portfolio managers, traders and treasurers from leading firms to discuss trends in the foreign-exchange markets and the economic outlook for the coming year.

The majority of respondents, when asked on their views on relative currency performance, said they expected currencies other than the euro, Japanese yen, Swiss franc and British pound to perform best against the US dollar next year.

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