There are more and more people doing foreign exchange, because investing in foreign exchange can indeed bring profit to some people, but if you want to make a profit through foreign exchange, you must have an understanding of foreign exchange knowledge. The more you understand foreign exchange knowledge, The clearer you understand the currency, the easier it is to make a profit.
Major currencies of foreign exchange
There are many currency varieties in the foreign exchange market. There are 6 main varieties, namely the U.S. dollar, the euro, the British pound, the Australian dollar, the Japanese yen, and the Canadian dollar. The currency pairs are the Euro/U.S. dollar, British pound/U.S. dollar, and Australian dollar/U.S. dollar. USD/CHF, USD/JPY, USD/Canadian dollar, etc. These six currency pairs are the most used varieties in the foreign exchange transaction process, usually using the US dollar as the default base currency, and even the name in the main currency will be ignored, and may be called the euro, the pound and so on. However, in foreign exchange transactions, the international currency code is usually used to express. When investing in foreign exchange, you only need to remember the international code of various currencies.
The characteristics of each currency pair and the corresponding operating habits
Europe and the United States: The euro ranks first in the non-US currency camp. From a fundamental point of view, not only the economic and monetary situation of the euro zone, every move of the United States will cause changes in the euro. If there is any change in the policy of the US dollar, the euro can be very important. It reflects the market’s point of view, which is very similar to the yen; from the disk perspective, the technical analysis pattern of the euro is relatively stable, and the fluctuations are relatively mild under normal circumstances, which is very suitable for volatile operations. Once a judgment is made, it is necessary to use patience to hold positions in exchange for large profits, which is slightly different from the British pound.
Pound-U.S. currency pair: The GBP/USD currency pair is a relatively active currency, and its volatility is much sharper than that of the Euro. Under normal circumstances, unilateral movements with no or only small corrections will not appear on the British pound. This The meaning is from the 4H diagram. Similarly, compared with the euro, the stop loss of the pound is larger and the fluctuation speed is also fast. It is very suitable for quickly reaping profits and then looking for opportunities to enter. This is different from the euro, which is suitable for holding positions.
The United States and Japan: I have not been the most confused currency pair against the yen, or the relationship between it and the US dollar. If the euro and pound are the representatives of non-US currencies, then the yen is in the same camp as the US dollar. The yen and the US dollar also have a hedging function. The impact of the US monetary policy on other currencies is relatively easy to understand, but the yen is not easy to understand. There are relatively few operations on the Japanese yen, and it needs to be studied.
United States and Canada: Generally speaking, the Canadian dollar depends on oil. I haven’t studied this carefully, but it still illustrates the commodity attributes of the Canadian dollar. The fluctuation of the Canadian dollar is relatively small compared to that of the euro and the pound, and large unilateral occurrences are also relatively rare. From mid-2009 to the present, it has been a large downturn, which is directly related to the fundamentals of the Canadian dollar. Canada’s economy is relatively stable without major ups and downs. One is that it is dominated by energy, and the other North American economic zone is also a huge market. The operating characteristics of the United States and Canada are also based on holding positions, but the goal should not be too large, just the edge of the large fluctuation of the daily chart level.
Merrill: The trend of the US dollar against the Swiss franc is basically the opposite of that of the euro. In other words, the trend of the Swiss franc has a relatively high correlation with the trend of the euro, so it is also a more suitable variety for holding positions, and the euro can be compared in operation. Since the volatility is similar to that of the Canadian dollar, it is relatively small, so the stop loss is relatively small.
Australia and the United States: The fundamentals of the Australian dollar against the US dollar have special factors. Due to the characteristics of the Australian economy, it is closely related to the conditions of the Asian economies. The Australian economy is resource-based, especially minerals. The Australian dollar has always been strong, mainly because of the strong Australian economy and the high interest rate of the Australian dollar. It is also a very good arbitrage currency. For the Australian dollar, it is basically non-operational.
At present, the main operating currencies are these few, and there has not been too much research on cross trading.