FOREX CURRENCIES: Questions and Answers for beginners
Are there currency pairs that go the same way?
Yes, there are currency pairs that move the same direction. They are called correlated pairs. The level of correlation determines the similarity in the currencies' moves.
There are pairs that move in the same direction almost mirror-like:
EUR/USD and GBP/USD
AUD/USD and EUR/USD
And pairs that move mirror-like, but in opposite directions:
EUR/USD and USD/CHF
GBP/USD and USD/JPY
By knowing which currencies have the highest chances to reflect each other moves traders can diversify the portfolio, instead of putting all eggs in one basket.
Further reading and examples of other currency pairs at:
Currency correlation Forex
Is there any chance the GBP will go back to the old value against the Euro (1.5 approximately in November 2007) or is it going to lose even more ground ?
Should the GBP recoup ground against the Euron, when will it happen? What is the possible scenario GBP/EURO in the next 6 months and in the next 12 months?
In the upcoming week or two (end of August, beginning of Sept. 2008) the pair is expected to attempt few more corrections approx. to 07930 level, from which prognosis is bullish with a target at 0.8090.
Overall, the pair is expected to remain within 0.79 - 0.81 area for 2008 year with, so far, the same expectaions for the beginning of 2009.
when do sell chf and when do we buy it?
i heard that when the price increase in front of chf that means the usd is going up and chf is going down so in this case we sell chf ? is that right
When trading USD/CHF pair: USD is the base currency and CHF is a counter currency. The base currency is always equal to 1 unit, in our case 1 USD. The counter currency represents the amount of that currency needed to purchase 1 unit of the base currency (1 USD).
So, for example, when USD/CHF is trading at 1.55 it means that it takes 1.55 Swiss francs to buy 1 US dollar.
Looking at USD/CHF charts: When the price moves up, it means that USD is getting stronger and CHF is getting weaker. When price moves down - USD is getting weaker and CHF is getting stronger.
When we buy USD/CHF pair we sell CHF in order to get USD. On a trading platform you simply use a Buy order to indicate that you want to buy USD/CHF pair, because you believe that the pair is going to trade up and the US dollar is going to get stronger.
When you feel that the pair has moved up enough and is about to descend, you Sell USD currency back and Buy CHF. On Forex trading platform is is done by simply creating a Sell order for USD/CHF pair.



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