› How does a trader not get bogged down in the snare of rumors

How does a trader not get bogged down in the snare of rumors

The foreign exchange market is a significant playground in which both individual participants and whole countries, and sometimes concretion of countries, join.
The exchange rate of the national currency impacts the economy of the country quite gratingly. An overly potent currency causes exports not profitable while an overly cheap currency can sabotage the confidence in the national currency, causing further downfall.

Hence, most governments are likely to maintain the currency in a stable price range by applying currency interventions and other resolutions to impact the rate.
And if everything is transparent with foreign exchange intrusion, what other courses to make a change in the exchange rate?
It’s novel and rumors, it’s not a mystery that the mass media in most circumstances work to order, launching customized news, which in one way or another impact the currency market.

For instances, in the context that has progressed at the moment on the currency pair EURUSD a year ago, the euro was worth 1.39 dollars for one euro, now the rate declined to 1.06, the falling that actually equal to 30%. This also indicates that all goods manufactured in the Eurozone has also declined in price by 30%, and the US has increased in price by the same amount.

Eurozone
Source: Politico Europe


It can be deduced that in such a case the European Union will make a further downgrade, enlarging the situation with Greece and not representing the real state of things. On the contrary, the US will attempt to de-escalate the American dollar with all its might in order to decline the price of goods manufactured in America.
Hence, one should not believe the news but should assess the actual value of both currencies and feasible movement prospects.

The euro currently stays at nearly a 10-year low, and despite the desires of the EU leadership, there are no economic preconditions for its decrease. The context with the dollar is completely inverse, transient betterment in the economy is constantly decreasing, possibly leading to a fall in the US currency.

The negative upshot may lead to trading on the strong news, then the trader can get profit only if he penetrated the market at the early stage of the movement.
And as regulated, everything incurred reversely, the price has already bordered on its side-chapel and only then the trader opts to unfasten a deal, as an outcome of a pullback and losses.


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