The most important factor determining the direction of a parity is the news about the currency concerned and the perceptions of the Market Players about that parity.
The issue is that if the USD raises the interest rate on the EUR / USD parity, the USD-oriented transaction can be opened without any technical analysis required.
News and economic data can be traced from various Forex sites.
In addition to this, Market Players may decide that if a parity is going to go up, the Buy operation can be started regardless of the technique. Perceptions of parities can be controlled with data called Sentiment.
Perhaps the most important technical issue in Forex is the determination of support and resistance points.
Resistance of a previous support when drawing Support-Resistance should not be taken for granted that a previous resistance might support.
After setting the graph to detect DDs, at least 2 points that are paused at the same level are determined and a horizontal line is drawn. The price is more likely to pause and change direction at this level.
Note the support and resistance in the picture. The price is having difficulty passing through that region.
Trend lines also affect parities like the same support resistance. Trend lines generally work with 3’s. This is called the sister technique.
When plotting the trend line, the previous 2 dips or crests are determined. The price is expected to return from these lines.
If the trend line is exceeded, resistance can be turned into support.
Simple example – what is Forex?
It is easier to talk with examples on different topics.
Think that you live in the US and you will go to Japan tomorrow. Do you want to get a good taste, get a nice Japanese porcelain or some Japanese scarf for your partner, you will also have to pay takside taxi and taxi fare. However, you have only US dollars in your pocket, but of course you are aware that we are using dollars in the Sweeden – Swedish Krona in the US, but there are yen in Japan. So, you have to buy some Japanese yen PAY using your dollars in your pocket. We can also say that you are “exchanging US dollars and Japanese money”. If you make currency between US dollar and Japanese yen, you can know how much I will pay for $ 1 (or say you need to know exchange rate). For example, when you go to Japan, you realize that one dollar can be about 100 yen and you decide to change 1000 $ and you get 1000 x 100 yen. After having a good time in Japan, you go home and you have 1000 yen left in your pocket. Of course you do not need this paralysis anymore, so you decided to trade for the US dollar in the future.
In fact, when you are buying money, you are participating in the forex market.
Forex traders often use the term “buy” and “sell” currency instead of “exchange”. Obviously the purchase of one currency is the sale of another currency, and the sale of a currency. Forex market is possible because exchange rates are not static and change very frequently. I got there and then your friend goes to Japan. However, he thinks that he can get 100 yen per dollar, but the exchange rate has changed and now he can only get 95 for 1 dollar. What a pity!