It’s not over until the trading is over, and in the forex market at least, that’s true as well. A major forex market meeting is underway this week, and while many forex traders will take their chances at home, others will be watching the action from the comfort of their own homes. While some forex traders are known to trade the meetings, others will be looking to capture the minutiae in an effort to build their portfolios and make money when the big game is over. Given how important these meetings are for the forex market and for the traders who follow it, it might be worth keeping an eye out for what’s ahead.
What to expect from the forex market meeting
At the conclusion of the monthly forex market meeting on February 28, the European Central Bank (ECB) will have made its decision on whether to launch a new round of stimulus into the Eurozone economy. The ECB meeting is the key event of the forex calendar, and while most forex traders will focus on the decisions and actions of the bank, others will be keeping an eye on the broader economic environment to see if there are any early signs of a cooling off in the German economy.
The ECB can choose to provide additional support to the Eurozone by increasing the size of the purchase package, keeping interest rates at a record low of 0% (known as the ‘Zeroth- Zinco’ rate), continuing the quantitative easing program, or any combination of these actions.
It’s important to note that the ECB has the ability to increase the size of the purchase package at any time, and it does so about once every three months. This action can have a significant impact on the forex market as traders buy or sell currencies in response to the size of the impact on their profits or losses.
Beyond the ECB, there are a number of meetings to keep an eye on this week. On the forex market calendar, there’s the Intercontinental Exchange (ICE) Forex Market Meeting in New York, where the world’s largest derivatives exchange will come together to discuss how best to clear its books and begin working on new products and services.
What to watch for this week
Beyond the headlines, what will really matter this week is the quiet conversations that take place behind the scenes at the meetings. While the public meetings give forex traders an opportunity to exchange views with their counterparts from the other side, it’s the behind-the-scenes exchanges that matter most.
It’s at these private meetings that decisions are made about the direction of the forex market. Major decisions are usually made in the context of areens, but smaller groups of banks and brokerages will also meet to discuss certain issues at hand. These forums are often more private, but don’t miss out on the forex market meeting calendar to see if there’s a private meeting you’d like to attend.
Buying and selling signals from the forex market
As is the case with most markets, sellers are often seen in the forex market. While there are clear sellers in the market when it comes to bonds and the US dollar, it’s the opposite that happens when it comes to the Forex market.
When a Forex market session is starting to show some life, you’ll often see buyers in the market. This often happens when the value of the pair is moving in the same direction as the sellers.
If you’re willing to take a long position in the forex market, look to set yourself up for success with buy signals and sell signals. When you see buy signals, take the orders seriously, and then place them with the understanding that the market may reverse course and sell you short.
When you see sell signals, don’t ignore them. Look for calls and put orders in place to protect yourself from a possible 3-for-2 trade. There are plenty of times when you can benefit from the selling action, and when it happens quickly enough, you can step back and take advantage of the situation.
What to expect at the G-20 meeting this week
With the G-20 meetings in Germany coming up this week, attention will once again be on the major economic players. Among the topics expected to be discussed are the Transatlantic Trade and Investment Partnership (T-TIP) agreement between the United States and Europe, the future of the IMF, and the impact of low interest rates on the economy.
Additionally, the G-20 will likely address the issue of global tight money and emerging market money flow issues. While many will likely focus on these topics, others will likely take note of the bank balance sheet as a key indicator of a country’s economic health.
Beyond these mundane points, there are significant risks and challenges that will be facing the G-20 negotiators as they work towards a final trade deal. A bad deal could have a significant impact on the global economy. A positive one could help spur the stock market and other investing measures.
Japan’s currency policy is the key to the forex market in the long term
It’s one of the most enduring and perplexing mysteries in financial markets — the relationship between the value of the Yen and the Plaza index. The puzzle of how the Yen will react to any given economic scenario is one that many analysts and investors are unlikely to solve.
There are several theories on how the relationship between the value of the Yen and the Plaza index can be explained, but the most popular one is that there is a positive correlation between the two.
This theory is easiest to explain in the context of the Japanese economy. Simply put, the stronger the Yen, the stronger the Japanese economy. The stronger the Japanese economy, the stronger the Yen. Simple.
More meetings for forex bulls and bears
One of the most fascinating aspects of the forex market is the roller-coaster ride that it can provide. On one hand, you have a market that is historically strong and has been for some time. On the other, you have a market that is economically healthy and relatively stable, with low inflation and a low debt-to-gdp ratio.
Both of these factors should bode well for the forex market in the long run, and it’s important to keep an eye on both to make sure they don’t change at the same time.
The forex market offers a myriad of opportunities each day. From currency trading to interest rate differentials, there’s always something new to explore in this market. To capitalize on these opportunities, it’s critical to either know the latest happenings in the financial markets or have a solid grasp on how markets work.
The forex market is a highly dynamic market that can change minute to minute. There are many opportunities to make money in this market, but it’s important to know what you’re doing and how to take advantage of these opportunities.
The market may be volatile, but the long-term rewards are worth the risk.