Identifying Trending & Range-Bound Currencies April 29, 2008
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by Boris Schlossberg
The overall forex market generally trends more than the overall stock market. Why? The equity market, which is really a market of many individual stocks, is governed by the micro dynamics of particular companies. The forex market, on the other hand, is driven by macroeconomic trends that can sometimes take years to play out. These trends best manifest themselves through the major pairs and the commodity block currencies. Here we take a look at these trends, examining where and why they occur. Then we also look at what types of pairs offer the best opportunities for range-bound trading.
The Majors
There are only four major currency pairs in forex, which makes it a quite easy to follow the market. They are:
