Forex Markets Developing New Trends
When we look at activity in the forex markets over the last three years, some relatively clear trend activity has characterized the space. Most of the bullish buying has come with the safe haven currencies and the US Dollar, in particular. This has created many of the forex trends that have been in place since roughly 2012. Nearer term, however, we have seen some changes in these trends and it will be important for forex traders to position themselves for the likely outcomes that are likely to unfold in the early parts of this year.
Price Outlook: US Dollar Index
Over the last year, we have seen trending activity in the US Dollar index with somewhat sideways-to bullish trading movements during the period. This type of activity has occurred because major bullish moves against currencies like the Euro (EUR/USD) but less so against currencies like the Swiss Franc (USD/CHF). Against the Euro, the US Dollar fell near parity last year for the first time ever so the results across all of the majors have not been equally positioned.
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Those looking to trade in the Swiss Franc, the Euro, the US Dollar or a variety of other world currencies can look to Swiss forex broker CornerTrader as it offers some of the best market research available on the market. Trading in the forex markets is something that should be considered by investors of all types, as there are some interesting opportunities emerging now that might result in increased potential for trading profitability.
Watching the Trends
Whenever longer term forex trends have started to reach an exhaustion point, it is generally a good idea to start considering contrarian strategies. This is beneficial because it can help you to identify price levels where it might be good to close out a previous trade, or to initiate a new trade. So if you are already positioned in the direction of the trade, it becomes more beneficial to find strategies for exiting a position and taking profits. For those looking to enter into new positions in anticipation of a new trend, these are some of the same price levels that can be used for trade entries.
These are some of the factors that will likely be encountered by those trading forex in the current market environment. We have seen some strong trending activity in these spaces over the last 2-3 years, so the pullback reversals here would be somewhat strong given the long term nature of the broader moves.