Forex News From Friday’s Release
Economic news play a very important role in the foreign exchange trading. This process takes some important preparations prior to trading. They are generally made during weekends. Time when the financial news are released are well known weeks before. So, the execution of these trades does not take too much time.
However, executing the trades does not take too much time if this suits your trading style. Economic news can have a significant effect on the forex pairs like the EUR/USD, USD/JPY, and GBP/USD. These are usually the most volatile currencies in the forex market. If any unexpected development occurs, the effect will directly affect the currencies. Economic news can also indirectly influence other currencies. Economic data released by various governmental agencies can have a major impact on the value of different currencies.
When currency pairs are affected by the economy news, the changes will be greater than the actual price. Therefore, the currency price should be able to absorb the losses caused by any economic event. The best time to execute these transactions is during the weekend. Weekend economic events are characterized by higher volatility. Economic data released by the government or banks are released in the early hours of Saturday and Sunday. These reports can have an enormous impact on currency pair prices, especially on the USD/JPY.
Economic news reported on Friday and early Saturday should be bought and sold earlier than Friday afternoon. The Friday a.m. releases generally have the highest price, and they can occur anytime between Friday afternoon and midnight. In order to execute successful trades, one hour before the economic news is released is ideal. This is the best time to make a trade because there won’t be another huge change on Friday. However, the best time for a GDT is Saturday morning.
Economic news that is released early Saturday morning are more difficult to analyze. It can take several hours for the news to propagate through the media. Therefore, fundamental analysis won’t be as helpful during this period. Currency traders should focus on price action, which can provide the support or resistance levels needed for profitable trades.
The release of the FOMC data can have a significant impact on the valuation of currency pairs. Economic news from the US, UK, and Japan can have a strong influence on global interest rates and central bank interventions. Economic news from the US can lead to increased inflation expectations. Central bank interventions, in particular interest rate cuts, can lead to more demand for the USD.
Economic news released on Friday may not influence the trading hours on Monday, but there is still time to take advantage of any break in the economic data set. Friday’s economic data releases are generally more volatile compared to the other two main news events. The shorter time frame and less newsworthy makes Friday’s forex news less important compared to the other two events. For short-term traders who want to capitalize on the volatility of Friday’s economic data, the best time to trade is on Saturday.
In addition to economic news, there is also some important political news that may influence the forex trading markets. The release of the European Central Bank’s QE program has been a very important development for the forex market in the last few months. News from the Fed will most likely come in detail columns in a detail column as it is released monthly. The release of this news is especially important as the European Central Bank aims to bring back the EUR/USD to its earlier levels. The EUR/USD is currently at a historic low and this may be the beginning of an exciting new bull market for the forex currency pair.