USDJPY is approaching its resistance at 112.16 (61.8% Fibonacci extension, 78.6% Fibonacci retracement, horizontal pullback resistance) where it is could reverse down to its support at 111.38 (50% Fibonacci retracement, horizontal pullback support). Stochastic (89, 5, 3) is approaching its resistance at 96% where a corresponding reversal is expected.
If your FOREX broker offers you a leverage of 1:100 you can trade with a 100 times more money than you have in your deposit. This means that if you want to buy 100 000 EUR/USD you only need to have a 1 000 actual euros. With this kind of leverage you can take a position that is a 100 times larger in value and expect a 100 times bigger profits or losses, therefore great care is advisable when placing your trade. Equities, on the other hand, are traded without leverage.
Many currency pairs will move about 50 to 100 pips (sometimes more or less depending on overall market conditions) a day. A pip (an acronym for Point in Percentage) is the name used to indicate the fourth decimal place in a currency pair, or the second decimal place when JPY is in the pair. When the price of the EUR/USD moves from 1.3600 to 1.3650, that's a 50 pip move; if you bought the pair at 1.3600 and sold it at 1.3650 you'd make a 50-pip profit.
The value of a country's currency depends on whether it is a "free float" or "fixed float". Free floating currencies are those whose relative value is determined by free market forces, such as supply / demand relationships. A fixed float is where a country's governing body sets its currency's relative value to other currencies, often by pegging it to some standard. Free floating currencies include the U.S. Dollar, Japanese Yen and British Pound, while examples of fixed floating currencies include the Chinese Yuan and the Indian Rupee.
USDCAD is approaching our first resistance at 1.3396 (horizontal overlap resistance, 61.8% Fibonacci retracement, 100% Fibonacci extension) where a strong drop might occur below this level pushing price down to our major support at 01.3327 (61.8% Fibonacci retracement, 61.8% Fibonacci extension). Stochastic (34,5,3) is also approaching resistance and seeing a...
If you take a look at the FOREX quotes on your trading platform you will see that there are two prices for each currency pair. One is the price at which you can buy, referred to as the "ask price", and the other is the price at which you can sell, referred to as the "bid price". The difference between these two prices is known as the spread. The ask price is always higher than the bid price.
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Advanced Trading is FOREX.com’s flagship platform and comes with a robust charting package loaded with a large selection of technical indicators (139 total) and drawing tools. Technical Analysis tools include automated technical analysis from Autochartist, which scans the markets for completed and emerging patterns and trade ideas. Also, more advanced traders can develop their own automated trading systems from the Automated Trading Center.
None of the models developed so far succeed to explain exchange rates and volatility in the longer time frames. For shorter time frames (less than a few days), algorithms can be devised to predict prices. It is understood from the above models that many macroeconomic factors affect the exchange rates and in the end currency prices are a result of dual forces of demand and supply. The world's currency markets can be viewed as a huge melting pot: in a large and ever-changing mix of current events, supply and demand factors are constantly shifting, and the price of one currency in relation to another shifts accordingly. No other market encompasses (and distills) as much of what is going on in the world at any given time as foreign exchange.
NZDUSD bounced nicely off its support at 0.6723 (100% Fibonacci extension, 61.8% Fibonacci retracement, horizontal swing low support) where it could potentially bounce to its resistance at 0.6765 (61.8% Fibonacci retracement, horizontal swing high resistance). Stochastic (55, 5, 3) is bounced off its support at 2.05% where a corresponding rise could occur.
Either way you don’t have to provide the full currency value to open your position. Instead you put down a margin deposit, which is a fraction of the full value. And you don’t actually buy or sell any currency: you are opening a speculative position on the change in value of the forex pair. Your profit or loss is realised when you close your position by selling or buying.
And so we come to the question of how to predict Forex movement? Fortunately, economists created the standard economic calendar, where they make daily predictions around various economic values based upon recent history. It generally contains the following data: date, time, currency, data released, actual, forecast, and previous. There are certain economic figures, which when announced, nearly always have a heavy impact on the movement of the FX market.
The logistics of forex day trading are almost identical to every other market. However, there is one crucial difference worth highlighting. When you’re day trading in forex you’re buying a currency, while selling another at the same time. Hence that is why the currencies are marketed in pairs. So, the exchange rate pricing you see from your forex trading account represents the purchase price between the two currencies.
Currency futures contracts are contracts specifying a standard volume of a particular currency to be exchanged on a specific settlement date. Thus the currency futures contracts are similar to forward contracts in terms of their obligation, but differ from forward contracts in the way they are traded. In addition, Futures are daily settled removing credit risk that exist in Forwards. They are commonly used by MNCs to hedge their currency positions. In addition they are traded by speculators who hope to capitalize on their expectations of exchange rate movements.
The foreign exchange market is the "place" where currencies are traded. Currencies are important to most people around the world, whether they realize it or not, because currencies need to be exchanged in order to conduct foreign trade and business. If you are living in the U.S. and want to buy cheese from France, either you or the company that you buy the cheese from has to pay the French for the cheese in euros (EUR). This means that the U.S. importer would have to exchange the equivalent value of U.S. dollars (USD) into euros. The same goes for traveling. A French tourist in Egypt can't pay in euros to see the pyramids because it's not the locally accepted currency. As such, the tourist has to exchange the euros for the local currency, in this case the Egyptian pound, at the current exchange rate.