Key Forex Market News

Key Forex Market News

Forex traders should be aware that the news you hear or see daily in the media can be used as important tools to perform trades and take positions in the Forex market. This is the reason we will explain what the key news affecting the Forex market are.

Key news of the market that can benefit the operator to better his Forex trading can come from a variety of sources, but are usually commercial or government derived. It is important for the operator to identify these opportunities as they are revealed or published. Bullish and Bearish tendencies in the Forex market are a reflection of what’s going to happen to currency, as its value fluctuates according to events happening around the world.

When trading currency in the forex market, there are complementary strategies the forex trader can use, as what happens in the market is based on statistical models, and probability indexes help predict future tendencies of various currencies.

These are the news that affects how the forex market behaves:

Financial news in the currency market are often associated with the “Buy the rumor” and “Sell the fact” concepts, this partly because in highly volatile markets, the effects stemming from news tend to manifest themselves before the events themselves take place

The greater part of news concerning the forex market is released by means of scheduled press conferences and national reports concerning:

Changes in the Employment and Unemployment indexes

  • Inflation rate
  • Consumer confidence index
  • Varying interest rates
  • Exports/Imports
  • Gross Domestic Product, etc.

How does this work?

At this time, news releases are not contemplated as a variable in the programmed news system’s agenda, as the focus of Investors or Forex operators who wish to adopt a primary market strategy, based on speculation and other rumors that happen before scheduled conferences occur.

Online forex operators make trading in the market easier,   supplying or reminding investors of the useful available tools suited to their particular agenda, as well as the suspected consequence of the day’s most important news story and/or press release.

An example of financial/commercial news that affects the currency market could be this story: Let’s suppose that a press conference on the growth of new jobs in the U.S. were to occur this afternoon. Online forex agents, as well as many other people in the know, believing that the data is going to be positive for the U.S. Market, will provide investors with this information.  On the other hand, you have reasons to believe that this news will not be as encouraging.

The Forex operator hopes that the economy of the U.S. will improve, so the majority of investors have invested in the U.S. Dollar, hoping for the dollar to increase in value and reap their rewards: These movements tend to cause the EUR/USD and the USD/JPY to rise.

With this in mind, you could go long on the EUR/USD and short on the USD/JPY when you trade on the market, according to what you believe to be a discrepancy between the predicted effect and the real world effect of the news forecast. 

When the news is finally released later that day, and the impact on the economy was not as good as it was rumored to be, just as you predicted, the EUR/USD and the USD/JPY will revert their trend, you should close your position and take the profit.

The lesson in basic strategies or operation strategies is that, although news stories placed in the context of the currency market may seem hard to understand at first glance, in the end they are easy to put to use. Investors, who primarily base their commercial strategies on technical analysis, must not ignore the impact and the power of basic operations in the currency market, since financial news stories show their effects on the market in the short term.

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