Under the trend we should understood the movement of currency pairs in the Forex market. The best time to track a trend is after the trading period is over. But in order to maximize the profit a professional trader should know at the beginning of the trading week which direction the Forex market will take.
In Forex market a trend is influenced by several factors. The direction of trend during a week can be recognized by two factors:
1) What currency pairs movement was recordered on Friday night on the American Stock Exchange
2) What was the price gap at the end of the last week and beginning of the next week at midnight on the Asian trading session. Each currency pair has its own level of resistance. When the price passes it, the resistance level very often becomes a support level. If so the probability that the same direction of the currency movement will be continued during a week is very high.
The USA session at the beginning of the week and the Asian session in the end of a week have the maximum resistance levels. This is considered as a starting point for the currency pairs. And its direction (up or down) influences on the trend movement throughout the week.
In order to determine the behavior of the currency pairs in Forex market for the following week, you need to track their behavior on Friday at the American Stock Exchange. This kind of test for trend’s direction and strength is performed with a help of the news of the weekend. If after the release of very negative news there was no sharp movement of currency pairs in the Forex market, then the movement will begin from Monday. This is due to the fact that banks and brokers simply were not ready for such a surge in the market.
In case if the currency pair has not started its movement during the USA trading session, then banks and brokers have been unable to determine the direction of the trend for the next trading week. And that means we should wait for Monday to identify the direction of currency movements.
To sum it up, we can say that Friday is a defining day of the Forex market’s situation for the next week, according to the behavior of the Elliott wave patterns.
1) If Friday showed a very big leap of currency pairs, due to their great potential power, then Monday and Tuesday will bring a new wave to the Forex market in accordance with the trend or the price correction.
2) If Friday has recorded a jump of currency prices against the trend, then at the beginning of the next week a first wave of the opposite trend will take place or a price correction will begin.
3) If the Forex market didn’t move much on Friday, then Monday and Tuesday will be the defining days.
When trading Forex every trader must analyze the economic calendar news, drawn up for the next week. Thus you can identify those events that could influence on the trend behavior during the next week.
Pay attention to the Asian trading session. In particular, watch the behavior of the trend in the night from Sunday to Monday. Its direction will determine the movement of the currency prices during a week.
If you want to earn good money in Forex market, you should understand that the behavior of a trend is influenced by many factors that you must know and study.
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