Sometimes a market breaks out of a range, moving below the support or above the resistance to start a trend. How does this happen? When support breaks down and a market moves to new lows, buyers begin to hold off. This is because buyers are constantly noticing cheaper prices being established and want to wait for a bottom to be reached. At the same time, there will be traders who are selling in panic or simply being forced out of their positions. 

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If traders are positive on the prospects for the Yen, they would expect the number on the right to go down – i.e. the Yen would be getting stronger against the Dollar. Traders would be buying less Yen with a Dollar as the Yen got stronger. Similarly, if the Yen was expected to weaken, forex traders would expect the Yen number to go up, reflecting the fact that the dollar could buy more yen.
Political instability and poor economic performance can also have a negative impact on a currency. Politically stable countries with robust economic performance will always be more appealing to foreign investors, so these countries will draw investment away from countries characterised by more economic or political risk. Furthermore, a country showing a sharp decline in economic performance will experience a loss of confidence in its currency and a movement of capital to currencies of more economically steady countries. These are just two simple examples of what can affect foreign exchange rates and the kind of things traders consider when developing forex trading strategies.  
What happens when the market approaches recent lows? Put simply, buyers will be attracted to what they regard as cheap. What happens when the market approaches recent highs? Sellers will be attracted to what they view as either expensive, or a good place to lock in a profit. Therefore, recent highs and lows are the yardstick by which current prices are evaluated.

Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. Forex trading involves risk. Losses can exceed deposits. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading.


Leveraged trading in foreign currency or off-exchange products on margin carries significant risk and may not be suitable for all investors. We advise you to carefully consider whether trading is appropriate for you based on your personal circumstances. Forex trading involves risk. Losses can exceed deposits. We recommend that you seek independent advice and ensure you fully understand the risks involved before trading.
There is an additional rule for trading when the market state is more favourable to the system. This rule is designed to filter out breakouts that go against the long-term trend. In short, you look at the 25-day moving average (MA) and the 300-day moving average. The direction of the shorter moving average determines the direction that is permitted. This rule states that you can only go:
For all economic calendar indicators, you will find the Previous number: that is the data in its last release (frequency of data release is variable: it can be last month, last trimester…). For most indicators, we add a Consensus number: that is a general agreement of experts on the outcome of the number. When the Actual data is released, it’s immediately displayed at the right of the volatility indicator. Better or worse than expected? If we had a consensus published, it comes either in green (it means the data is better than expected) or in red (worse than expected). The Deviation ratio is an FXStreet exclusive calculation which measures the surprise caused by an event when the Actual data differs from the Consensus. Its number usually oscillates in an open scale between -7 and +7. 
This is an exceptionally good strategy and works across all timeframes and for all currency pairs. This trending strategy picks breakouts from a continuation so as to help traders trade the retests. Candlesticks, pivot points, support and resistance levels and round numbers can be used when employing this strategy. Off-chart indicators are not necessary.
Forex Factory News: The Forex Factory is designed to attract a specific niche of forex traders. It is one of the best online forex platforms for news-based trading as information quality and presentation are the two primary fortes of the brand. A daily update of all global news is neatly presented along with a scanner that shows the impacted forex pairs.
You might want to focus on some type of data and ignore the rest: less noise means more efficiency. Click on the  button at the top of the economic calendar. You can type a keyword or select countries, dates range, event categories or impact levels. Then hit the “Apply” button. If you always need to see the same data when you come to our calendar, you can save your settings for the next visit! We said efficiency, right?
This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.
The factors mentioned above can also cause a currency to decline. For example, the currency of a country with low inflation will generally rise because that country's purchasing power is higher relative to other currencies. Even natural disasters such as earthquakes or tsunamis, which put a strain on a nation’s economy, can have a negative impact on a currency.

Strong trending markets work best for carry trades as the strategy involves a lengthier time horizon. Confirmation of the trend should be the first step prior to placing the trade (higher highs and higher lows and vice versa) – refer to Example 1 above. There are two aspects to a carry trade namely, exchange rate risk and interest rate risk. Accordingly, the best time to open the positions is at the start of a trend to capitalise fully on the exchange rate fluctuation. Regarding the interest rate component, this will remain the same regardless of the trend as the trader will still receive the interest rate differential if the first named currency has a higher interest rate against the second named currency e.g. AUD/JPY.

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