Predicting Forex Trends

by David Jenyns on July 31, 2011

www.theforexnittygritty.com – Predicting Forex trends is often the key to how to trade Forex. In this case we are not talking about minute by minute or hour by hour variations in the Forex markets. Rather we are talking about large shifts in the relative values of various currency pairs that take place over weeks, months, and years. Accurately predicting Forex trends can result in substantial gains in trading currencies directly or trading via the futures or options markets for foreign currencies. A lot of attention these days is given to the Euro and the US dollar because of the twin debt crises on opposite sides of the Atlantic. Both currencies are weighed down by the size of their debts and the consequent fallout onto both of their economies. In predicting Forex trends many choose to believe that the Euro and US dollar will both continue their gradual slides in relation to other currencies. For example, trading in Asian currencies and the Australian dollar in relation to the US dollar has be active of late as traders exit US dollar positions in favor of the Aussie, Yen, Yuan, Rupee, Taiwanese dollar, or Singapore dollar. In predicting Forex trends a trader is well advised to consider the effects of a rise or fall of a currency on its nation’s economy. Japan is a case in point right now. A recent rise in the Yen was coupled with a fall in a number of Japanese stocks. The fact is that Japan wrote the book on supporting the US dollar in order to make their products
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The greenback got smoked after the release of a report showing weaker than expected US GDP growth through the first half of the year.
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