Have you ever imagined why the recent European Debt Crisis involving Greece had caused such a global crisis? Why did the whole world worry when Britain decided to go ahead with Brexit? EUR/USD is the most popular currency pair in the forex market. Any shift in the rating of Euro against USD would mean that a lot of people will lose a lot of money. If you are trading in forex or plan to, you must have or will trade with this pair. Hence, a proper EUR/USD technical analysis is an absolute necessity.
Technical analysis is used to predict the forex market. The main principle of technical analysis is that historical price action which helps in predicting the future trend. In simple words, with a technical tool, you can predict how Euro will behave against USD by observing its past trends.
How does EUR/USD technical analysis forecast work?
There are technical analysis tools available to do the job of prediction. Bollinger Bands, relative strength index, Fibonacci retracements and stochastic oscillators are few that analysts use. All of these tools are capable of predicting the EUR/USD market shift based on recent trends and data gathered over the past few years.
The task of EUR/USD technical analysis can be understood in the following way. The behaviour or Euro against USD is observed over a span of time (say 24 hours). This data is recorded, and the process is repeated for the next few days. Then, the graph so obtained is fitted to an appropriate indicator which predicts its future movement.
All EUR/USD technical analysis today works on two basic assumptions. First, price behaviour of every market will follow a certain trend and will not deviate, and second, history will repeat itself. Some data are being collected over hundreds of years, and they still produce accurate future predictions.
Is eur usd daily technical analysis necessary?
As a beginner or a newbie, you will start trading with small amounts. EUR/USD is a safe currency pair and investing in it will definitely reap you profits. A daily analysis is smart move to maximise profit and minimise loss. Understand how.
Say the current quote of EUR: USD stands at 1.68. So, if you start trading with USD 100,000, you will be able to buy nearly 59,524 Euros (approximated). Now, if the quote rises with time, there is no problem, and you make a decent profit by selling the same.
What if the quote falls? Say to 1.66. Your intuition will tell you to sell of the Euros now to prevent more loss, but a proper technical analysis will suggest the opposite. An indicator will tell you to sell the Euros now as the quote is likely to fall more. When the rating falls to 1.62, buy more Euros and wait for it to rise again to 1.68. A daily analysis will give you this picture and will allow you to reap high profits.
Perform eur usd technical analysis today instead of going into the market blindly just because the currency pair is popular. At times, profit can be as high as 40%. Technology is available, put it to use.