The financial market is very fluid and regularly undergoes significant changes affecting, among other things, forex trading.
What events to pay attention to:
- GDP: if GDP is growing, we can conclude that the state’s currency will also grow
- Consumer price index: if the CPI rises, it will lead to a fall in the currency
- Unemployment rate: an increase in the unemployment rate is bad for the economy and the national currency
- Non-farm payrolls (NFP): growth of the index indicates the growth of the currency
- Retail sales: an increase in retail sales indicates an increase in the national currency
- European central bank interest rates: rising interest rates are a positive factor for the national currency
- Crude oil price: if the prices go down, the currency goes up
- Consumer sentiment index and personal income
All recent changes are reflected in the economic calendars and earnings calendars of companies. Let’s look at a few examples.
Political factors: presidential election
World stock indexes rose after the news of Joe Biden’s victory in the U.S. presidential election. According to analysts, Biden is more trade-friendly than his election opponent Donald Trump. However, it is difficult to predict the behavior of the U.S. market in the context of an election, as the behavior of indexes is more dependent on the macroeconomic environment.
Economic factors
Key stock markets always live with expectations of future events. Normally, they anticipate trends in the real economy for about six months. At the very least, major economic downturns in individual countries and regions are usually preceded by declines in their respective stock markets.
Be prepared for the unexpected: the Elon Musk situation
Elon Musk can inflate the value of Bitcoin with a single tweet or just as dramatically drop it in value. In the most recent news: the Bitcoin exchange rate fell by more than 5% — to $36.7 thousand — after the owner of Tesla and SpaceX, Elon Musk hinted on Twitter that he lost interest in the cryptocurrency.
How to predict changes
Any strong movements in the financial markets begin with the publication of economic news: statistics, some negotiations, force majeure — all this will be reflected on the price chart.
The economic calendar looks like a summary of the indicators of different countries. It also shows the volatility of an event, its actual, previous and forecasted value.
To make money on expectations of some news, it is logical to buy before the publication, if some indicator is expected to grow. Another option is to trade during the publication of the indicator when the data has already been released and the movement in some direction has begun.
To earn money online, traders can take advantage of the functional economic calendar by FBS.
Title: Political, economic, and other events that affect the forex trading
Description: What are the factors that affect the global economic market? The economic calendar will help you keep track of the major events.