| When I thought about some of the first things I learned | | | | forex market to defend the yen's value. Another |
| before trading the Forex market, fundamental analysis | | | | factor affecting the yen is the overall strength of its |
| came to mind. Fundamental analysis refers to factors | | | | banking sector. |
| that affect the price of a currency pair. It is important | | | | United Kingdom- British Pound. This currency is |
| not only to perform technical analysis based on your | | | | important to watch because the U.K. is one of the |
| charts and indicators, but to also be aware of the | | | | largest economies in the world. The pound is affected |
| macroeconomic events that can affect a currency | | | | by energy and oil prices. As they rise, the pound should |
| pair. What helped me in my forex education was | | | | strengthen. |
| learning each currency's characteristics. Whichever | | | | Switzerland- Swiss Franc. The Swiss Franc is known |
| pair or pairs you choose to trade, knowing each of | | | | as an investor’s safe haven in times of crisis and |
| their characteristics is extremely valuable because it | | | | uncertainty. Since Switzerland's banks controls much |
| aids in the accuracy of any trade you perform. | | | | of the world's wealth, any reports of bank mergers |
| Europe- Euro. This currency is rather new. It began | | | | and/or poor earnings directly affect the value of the |
| trading in 1999; however the EURO/USD pair is the | | | | franc. |
| most traded. Because of this, the EURO/USD is very | | | | "The Commodity currencies" as they are called refer |
| liquid. The euro is greatly affected by interest rates. If | | | | to the Canadian, Australian, and New Zealand dollars. |
| you are trading the EURO/USD pair, you must pay | | | | Since commodities consist of the majority of Canada's |
| attention to the Euribor (Europe's three-month interest | | | | exports, the currency will strength or weaken |
| rate), to watch for any changes in investor reactions | | | | depending on these prices. Usually the Usd and Cad |
| when trading the EURO/USD pair since the Usd and | | | | will normally trend in the same direction because most |
| Euro rates affect each other. The EURO/USD is my | | | | of Canada's exports are shipped to the U.S. |
| personal favorite pair because of the many | | | | Australia- Australian Dollar. The Australian dollar is most |
| opportunities it gives for potential trades. | | | | connected to gold prices. The interest rate differential |
| Japan- Japanese Yen. Japan is the largest economy in | | | | is monitored because it can guide the long-term trend. |
| East Asia; therefore the yen is used as an alternate | | | | New Zealand- New Zealand Dollar. The New Zealand |
| for the whole region's economy. If there is trouble in | | | | dollar is linked to commodity prices. It is also closely |
| the surrounding countries, the yen may drop in value. | | | | related to the Australian dollar, meaning they can act |
| The Bank of Japan is known for intervening in the | | | | as alternatives for each other. |