Know When to Buy or Sell a Currency Pair
Forex trading involves trying to predict which currency will rise or fall versus another currency. How do you know when to buy or sell a currency pair? In the following examples, we are going to use a little fundamental analysis to help us decide whether to buy or sell a specific currency pair. The supply and demand for a currency changes due to various economic factors, which drives currency exchange rates up and down. Each currency belongs to a country (or region). So forex fundamental analysis focuses on the overall state of the country’s economy, such as productivity, employment, manufacturing, international trade, and interest ratezzzzzzzz. Wake up! If you always fell asleep during your economics class or just flat-out skipped economics class, don’t worry! We will cover fundamental analysis in a later lesson. But right now, try to pretend you know what’s going on… EUR/USD In this example, the euro is the base currency and thus the “basis” for the buy/sell. If you beli...
