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Forex Forecasts

forecast-signalsUsing forex forecasts is one way of keeping abreast of volatile forex markets. It certainly helps you to discern the factors that affect exchange rate changes. But why should you bother about the factors that could affect exchange rate changes? That is precisely because, success in forex trading depends on knowing exactly what and who will affect currency rate changes at any given moment in time. Forex forecasts help you solve this problem to a great extent.

Forex markets are so dynamic that even fortunetellers would have difficulty guessing what could be the next trend setting movement. Therefore basing your decision on a forecast is useful but somewhat risky. Do not ever consider a forex forecast as a definitive or final prognosis of the trends in the forex market. It is just a useful tool and nothing more.

Always remember a forex forecast has absolutely nothing specific about it, which is not to say that it is vague either. Therefore when you see a forex forecast you have to check it out with some projected exchange rate fluctuation levels that would give you an idea whether the forex forecast shows a likely possibility to be true or not

Where and what type of forex forecasts service should you look for?

There are free avenues of forex forecast information on the Internet and if you don’t have patience to search for that, go right ahead and get yourself forex forecast information on a subscription basis. There is no 100% accuracy in these forecasts, but you would do well if you get a forecast service that has the most accurate percentage rate of success in prediction.
I would suggest that you first look for a forex subscription service that offers free information on a trial period, and then test its accuracy before actually using the services. For example you could also use some site that sends out forex forecast through emails so that you try it and then decide whether to avail their services or not. A forecast that tells you a profit-taking position and a stop-losing position would be ideal. That’s the type of forecast you should be specifically looking out for.

How would a forex forecast look like?

Given below are a few types of forex forecasts you will eventually get to see when you trade forex. But these are general type of forecasts. There is nothing specific about, but it does give you a broad outlook of the market.
This is how a forex forecast would likely look like if it were based on technical analysis:
EUR/USD – Euro Dollar
Short term (Intraday)
1,5668. EUR USD broke 1,5630 resistance. The volatility rises. Bollinger bands are deviated. ForexTrend 1H (Mataf Trend Indicator) is in a bullish configuration. 4H ForexSto (Modified Stochastic) indicate a bullish pressure on EUR USD. The uptrend should continue on 1,5820 (140 pips) resistance. We won’t take a position. The risk/reward ratio is too high to take a position.

This is how a forex forecast would look like if it were based on fundamental analysis:
U.S. Dollar Trading (USD) after trading near weekly highs against all the majors early in the European session the dollar had an abrupt turn last night on the back of ECB president Trichet’s comments alluding to a rate rise in July “I didn’t say it’s certain. I said it’s possible”. As the Euro climbed it dragged Crude Oil and most other currencies with it. Economic data out last night included the Weekly Jobless claims stronger at 357K vs. 374K expected. The US share markets had a good rally on positive Wal-Mart reports and Oil gains, the NASDAQ was up 46.80 (1.87%) and the Dow Jones was up 213.97 points (-1.73%). Crude Oil closed up $5.49 ending the New York session at $127.79 per barrel. Looking ahead, NonFarm Payrolls forecasted at -50k and Unemployment rate expected to rise from 5.0% to 5.1%.

Another folly would be to rely on a single forex forecast service. You should always be asking yourself the question what if the forecast were wrong. Check and cross check—that should be the key to using a forecast service. In all probability a forex forecast service that is both online and offline would be ideal.

How would you use a forex forecast?

If you were a day trader you could use the daily high/low forecasts as a guide for entry and exit points. Who is a day trader? A day trader is a person who opens and exits a forex trade the same day. Day Trading is very difficult which is why many beginner forex traders do not really make much out of it. As a position trader the daily and/or weekly predictions could be used for setting stop losses and trailing stops and also to select potential trades that offer the maximum profit. So a forex forecast is useful to almost all kinds of traders.

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