Top Three Macroeconomic Trends For Forex Traders To Watch In 2019

A trend is a tendency for prices to move in a particular direction over a reasonable span of time. Trends can be long term, short term, upward, downward and even sideways. Success with forex market investments is tied to the investor’s ability to identify trends and position themselves for profitable entry and exit points. A good understanding of trends in forex can be gotten through various online forex webinars.

The forex market most often goes in trends as compared to the stock market. This is largely because the stock market is made up of a collection of individual stocks that are generally affected by the micro-dynamics of particular individual companies. The forex market, on the other hand, is controlled and moderated by macroeconomic trends that can sometimes take years to play out. These trends usually best manifest themselves through the major pairs such as the EUR/USD, USD/JPY, GBP/USD, and USD/CHF.

Trading successfully in forex requires a good understanding of its fundamentals and the concepts of market analysis. Keeping up with the latest trends sometimes through different forex webinars can also help you trade and make important decisions based on the sentiment of the market and its condition as a whole. The three major macroeconomic trends to look out for in 2019 include.

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1. Global Political Climate And Elections

It is generally anticipated that the rise of populism as a result of Brexit and Trump’s victory over polling-odds. It is widely thought that those left behind from the fruits of globalization also feel battered by fiscal austerity and the perceived threat of foreigners; these notions threaten the core of Europe and many institutions of the Eurozone.

While the Dutch elections in early March provided some respite, the bigger threat and game-changer has always been the French presidential elections in April and May. Marine Le Pen’s National Front party may break through given the unpopularity of established French parties.

The German elections follow in September, providing an additional gauge on whether the populist wave has crested – or not. And let’s not forget the Brexit negotiations, which are likely to start next month and prove, like all divorces, tortuous and protracted.

2. Monetary Policy In Major Economies

The US experienced a swifter recovery cycle than other economies, resulting in two minor interest rate increases; in Europe, Japan, and the UK, ongoing quantitative easing policies have been less successful and will remain in place for the next few years.

The Trump administration’s pro-growth and pro-business policies have yet to be fully formulated, but they have already kindled optimistic animal spirits in the US stock market, attracting foreign savings and lifting the dollar against all-comers in the process.

On the back of a strengthening recovery, IHS Markit expects the dollar to continue to strengthen in the near term – however, the pound and euro are also expected to gain traction beginning in 2019.

3. Regulation And Price Transparency Will Be The Main Highlights For This Year

The forex market is expected to come out stronger this year, propelled by the increase in regulation and the improved transparency in the prices. If the exchanges will continue to cooperate with regulatory councils and they make ways to provide transparency in the market by improving their technology, the forex market can definitely maintain a positive trend that is definitely stronger than before.

Emerging market economies have been hit hard by the collapse in commodities prices. Yet, some countries have fared better than others and could be poised for currency rebounds. India, the Philippines, Malaysia, and Indonesia are examples of countries that have benefited from cheaper commodities. Others, such as Russia and Brazil took early and sharp policy measures such as letting their currencies depreciate, raising domestic interest rates and tightening fiscal budgets and are weathering the storm better than Nigeria, South Africa, Gabon, and the Congo Republic.

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