Which ever financial instrument you are considering trading the Forex markets, whether its AUS, NZD, EURUSD or GBPUSD there will always be trends in the market to watch for. For ease of reference, all these terms refer to the major world currencies. To begin with the most widely traded currency pairs are the US dollar, the Australian dollar, the Canadian dollar and the British pound. The most popularly traded Forex markets in the world are:
This is the current price of Canadian dollars against the US dollar. While it has been a long term trend, recently it has accelerated in the last few years. The Canadian dollar is highly respected throughout much of the world because it is widely recognized as a “real” currency, just as the US dollar is accepted as “real” by virtually all electronic machines. The Canadian dollar is currently one of the most widely traded and highest traded currency pairs in the world.
This is a short term price comparison to the US dollar against the Euro. It is important to remember that the Euro is not actually a traditional currency pair; it was known as “the European Currency” during the years leading up to the World War II when it was used as a currency replacement for the US dollar. Many investors who had made investments in the European Exchange markets during the war chose to convert their units into the Euro rather than the US dollar, which helped to reduce their loss during the exchange rate trouble. The Euro has been an excellent investment vehicle over recent years as the European Central Bank (ECB) has taken an accommodative stance to help stabilize the economy in Europe.
Investing in the Eurozone can be very beneficial to investors who are familiar with European markets and the eurusd trading system. However, the recent trend of investors buying the Euro versus the US dollar can be very volatile. If you are an experienced trader who has made substantial deposits into the Eurozone area, it may take some time before you begin to see positive returns. There are some signs that the EUR/USD may reverse itself in the near future. This reverse may be caused by economic stimulus measures taken by the European Central Bank. This can result in the Euro becoming more attractive to other global investors who have already made deposits into the area.
Traders will need to understand the relationship between the Euro and the AUDUSD. Trading the two currency pairs will require knowledge of both the strengths and weaknesses of the two investments. One of the things that investors need to know is how the European Central Bank will proceed with its stimulus program. If it continues to pursue the interest rate policies it has been implementing, the strength of the Eurozone will continue to weaken and the AUDUSD will become stronger against the US dollar.
The base currency of Europe is the Euro. A strong Eurozone will increase the value of the Eurozone, and this will be good news for those investors who have made investments in the area. If the Euro continues to weaken compared to the USD, the EUR/USD will lose its attractiveness to potential investors. Traders will need to focus on the differences between the two currency pairs when making their decisions. This can be a very useful study to learn about the dynamic between the Euro and the AUDUSD.
The most significant price level in the trading of the Euro and the AUDUSD occurs during the early part of the European session. The price level will typically be between zero and five percent over the course of this period. This price level is considered a strong base for the EURUSD and can be a good place to start with the analysis of the trade. During this time the Euro will generally be stronger against the US dollar. It will be important to watch the developments within this price level because if investors believe that the Euro is over-valued, then they may want to sell their EURUSD pairs. This will limit the number of buyers that are interested in these currencies during this time.
The low point is typically reached in mid-day when the Euro becomes over-valued in relation to the dollar. This situation will be an indicator that the EURUSD will likely continue to move against the US dollar over the course of the trading day. Traders will need to monitor the movements of the euro very closely because it is one of the most important price areas. As can be seen from the previous article, this price volatility provides us with an excellent opportunity to make some good long term investment decisions.