• eur/usd 1.1862

    0.18

    BTC/usd 15.674.99

    8.60

    ETH/usd 674.99

    13.60

  • eur/usd 1.1862

    0.18

    BTC/usd 15.674.99

    8.60

    ETH/usd 674.99

    13.60

  • eur/usd 1.1862

    3.95

    BTC/usd 15.674.99

    4.78

    ETH/usd 674.99

    11.37

What drives the price of the forex market

Forex on a Forex chart with trendlines

Forex chart with candles and trendlines

Forex market price action

In a layman’s language, f Forex price action is precisely what its name says or sounds. It is the “action” of “price” its behavior. It describes the way a market moves, including its trends and key support and resistance levels. There is a trading strategy that revolves along this movement alone.

key drivers of price in forex market

Demand and supply

On a fact that its a free forex market the price is determined by the interaction between buyers and sellers, the demand comes from the buyers of a particular product, commodity or instrument as the supply is determined by the sellers of a commodity or any trading instrument. If an equilibrium is reached in the market ,we call it a stale mate between the sellers and buyers it means price of the instruments will remain unchanged over a long period of time.

World politics

The markets tries as hard as possible to ignore the influences of politics but politics always have an impact on the price movement of the market, if the domestic policies of the government are stable then the companies in that country will remain stable and if the politics is debilitated then it affects companies and shares in the forex market.

Future interest rates

These are perhaps the most classical of all the drivers of Forex rates. Long-standing economic doctrines tell us that money flows to wherever it can receive the best return regardless of whether that flow of funds is between bank deposits and bonds, depending on the power of the currency and the factors that surrounds the buying power as the interest rates vary so will be the forex price movement.

Deviance in macro economics data

Macroeconomic data is the lifeblood of the modern markets. Economic data is tailor-made for the internet and DMA trading, and the two go hand-in-hand today. It will come as no surprise to find that economic data releases move the markets. Even if you rely on technical analysis to drive your trading, you will still want to pay attention to key dates and times on the macroeconomic calendar. This is simply because those are the points when you are likely to experience fluctuations in FX prices

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