When I thought about some of the first things I learned before trading the Forex market, fundamental research came to mind. Fundamental research appertains to factors that affect the price of a currency pair. It's critical not only to perform technical research based on your charts and indicators, but to also be conscious of the macroeconomic events that may affect a currency pair. What helped me in my currency exchange education was learning each currency's traits.
Whichever pair or pairs you decide to trade, knowing each of their traits is very valuable because it helps in the precision of any trade you perform. Europe- Euro Buck. This currency is rather new. It started trading in 1999; however the EURO/Dollars pair is the most traded. Because of this, the EURO/USD is extremely liquid. The euro is significantly affected by rates. If you're trading the EURO/Bucks pair, you must pay attention to the Euribor (Europe's three-month rate), to look out for any changes in investor reactions when trading the EURO/USD pair since the Usd and Euro Buck rates affect one another. The EURO BUCK/BUCKS is my personal favourite pair because of the many opportunities it gives for potential trades. Japan- Japanese Yen. Japan is the biggest economy in East Asia; thus the yen is used as an alternative for the entire region's economy. If there's trouble in the surrounding states, the yen may drop in value.
The Bank of Japan is famous for intervening in the forex market to protect the yen's value. Another factor affecting the yen is the overall strength of its banking sector. United Kingdom- English Pound. This currency is crucial to watch as the U.K. Is probably one of the largest economies on the planet. The pound is affected by energy and oil prices. As they rise, the pound should strengthen. Switzerland- Swiss Franc. The Swiss Franc is commonly known as an investor?s safe harbor in times of crisis and uncertainty. Since Switzerland's banks controls a lot of the world's wealth, any reports of bank mergers and/or poor revenues directly impact on the value of the franc.
"The Commodity currencies" as they appear to be called refer to the Canadian, Australian, and New Zealand bucks. Since commodities consist of a lot of Canada's exports, the currency will strength or weaken depending on these costs. Usually the USD and Cad will usually trend in the same direction because most of Canada's exports are distributed to the U.S. Australia- Australian Dollar.
The Australian dollar is most hooked up to gold costs. The rate differential is monitored because it can direct the long-term trend. New Zealand- New Zealand Buck. The New Zealand buck is linked to commodity costs. It's also tightly related to the Australian greenback, meaning they can act as alternatives for one another.
Whichever pair or pairs you decide to trade, knowing each of their traits is very valuable because it helps in the precision of any trade you perform. Europe- Euro Buck. This currency is rather new. It started trading in 1999; however the EURO/Dollars pair is the most traded. Because of this, the EURO/USD is extremely liquid. The euro is significantly affected by rates. If you're trading the EURO/Bucks pair, you must pay attention to the Euribor (Europe's three-month rate), to look out for any changes in investor reactions when trading the EURO/USD pair since the Usd and Euro Buck rates affect one another. The EURO BUCK/BUCKS is my personal favourite pair because of the many opportunities it gives for potential trades. Japan- Japanese Yen. Japan is the biggest economy in East Asia; thus the yen is used as an alternative for the entire region's economy. If there's trouble in the surrounding states, the yen may drop in value.
The Bank of Japan is famous for intervening in the forex market to protect the yen's value. Another factor affecting the yen is the overall strength of its banking sector. United Kingdom- English Pound. This currency is crucial to watch as the U.K. Is probably one of the largest economies on the planet. The pound is affected by energy and oil prices. As they rise, the pound should strengthen. Switzerland- Swiss Franc. The Swiss Franc is commonly known as an investor?s safe harbor in times of crisis and uncertainty. Since Switzerland's banks controls a lot of the world's wealth, any reports of bank mergers and/or poor revenues directly impact on the value of the franc.
"The Commodity currencies" as they appear to be called refer to the Canadian, Australian, and New Zealand bucks. Since commodities consist of a lot of Canada's exports, the currency will strength or weaken depending on these costs. Usually the USD and Cad will usually trend in the same direction because most of Canada's exports are distributed to the U.S. Australia- Australian Dollar.
The Australian dollar is most hooked up to gold costs. The rate differential is monitored because it can direct the long-term trend. New Zealand- New Zealand Buck. The New Zealand buck is linked to commodity costs. It's also tightly related to the Australian greenback, meaning they can act as alternatives for one another.
About the Author:
Todd Watson trades in Forex, tests Binary Options and is always hunting for the next best Forex strategy.
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