Trading Euro Against US Dollar
EUR/USD is the most heavily traded currency pair in the global currency markets at the moment. Trading currencies can be exciting and lucrative. Its a great market because of the way politics affect the trends. Elections, strikes, and sudden developments, both good and bad, can lead to significant trading profits if you stand ready to trade the euro is a convenient currency because it encompasses the policies and the economic activity and political environment of a volatile but predictable part of the world: Europe.
In the United States, where the free-market approach and a usually vigilant Federal Reserve make more frequent adjustments on interest rates. France, Italy, and Germany, the largest members of the European Union (EU), normally operate under high budget deficits and tend to keep their interest rates more stable.
The general tendency of the Fed is to make the dollar trend for very long periods of time in one general direction. Aside from the technical analysis, here are some general tendencies of the euro on which you need to keep tabs:
- The European Central Bank is almost fanatical about inflation, given Germanys history of hyperinflation in the first half of the 20th century and the repercussions of that period, namely the rise of Hitler. That means that the European Central Bank raises interest rates more easily than it lowers them.
2) EUR/USD pair is affected by what is happening politically and economically both in Europe and the US. The European Central Banks actions become important when all other factors are equal, meaning politics are equally stable or unstable in the United States and Europe, and the two economies are growing. For example, if the U.S. economy is slowing down, money slowly starts to drift away from the dollar. In the past that meant money would move toward the Japanese yen; however, because the market knows that Japans central bank will sell yen, the default currency when the dollar weakens is often now the euro.
3) EUR/USD currency pair is heavily influenced by the political developments in the Eurozone. Especially when the European economy is slowing The flip side is that the market becomes jittery and often sells the euro during political problems in the region.
As a word of caution, its okay to form an opinion and have some expectations, but the final and only truth that should make you trade is what the charts are showing you. As usual, you want to closely monitor major currencies and the cross rates. The direction that counts is the one in which the market is heading.
Combining fundamental analysis with the technical analysis can give you the edge as a forex trader. Fundamental analysis can help you determine the strong/weak currency pair. Use fundamental analysis to determine if USD is expected to lose value and EUR is expected to gain more strength that means that the currency pair EUR/USD is perfectly timed for swing trading. Use technical analysis to make the entry and exit decision. - 23229
In the United States, where the free-market approach and a usually vigilant Federal Reserve make more frequent adjustments on interest rates. France, Italy, and Germany, the largest members of the European Union (EU), normally operate under high budget deficits and tend to keep their interest rates more stable.
The general tendency of the Fed is to make the dollar trend for very long periods of time in one general direction. Aside from the technical analysis, here are some general tendencies of the euro on which you need to keep tabs:
- The European Central Bank is almost fanatical about inflation, given Germanys history of hyperinflation in the first half of the 20th century and the repercussions of that period, namely the rise of Hitler. That means that the European Central Bank raises interest rates more easily than it lowers them.
2) EUR/USD pair is affected by what is happening politically and economically both in Europe and the US. The European Central Banks actions become important when all other factors are equal, meaning politics are equally stable or unstable in the United States and Europe, and the two economies are growing. For example, if the U.S. economy is slowing down, money slowly starts to drift away from the dollar. In the past that meant money would move toward the Japanese yen; however, because the market knows that Japans central bank will sell yen, the default currency when the dollar weakens is often now the euro.
3) EUR/USD currency pair is heavily influenced by the political developments in the Eurozone. Especially when the European economy is slowing The flip side is that the market becomes jittery and often sells the euro during political problems in the region.
As a word of caution, its okay to form an opinion and have some expectations, but the final and only truth that should make you trade is what the charts are showing you. As usual, you want to closely monitor major currencies and the cross rates. The direction that counts is the one in which the market is heading.
Combining fundamental analysis with the technical analysis can give you the edge as a forex trader. Fundamental analysis can help you determine the strong/weak currency pair. Use fundamental analysis to determine if USD is expected to lose value and EUR is expected to gain more strength that means that the currency pair EUR/USD is perfectly timed for swing trading. Use technical analysis to make the entry and exit decision. - 23229
About the Author:
Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in day trading stocks and currencies. Try These 1500 Pips A Day Forex Signals From Heaven. Know Forex Rebellion!
posted by X - Men @ 2:59 AM
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