Investors who trade forex need to pay attention to markets that impact certain currencies, as the EUR/USD rebounded recently with U.S. equities on the decline. This means that indicators that forecast decreases to stocks could help traders predict currency market volatility, which could provide information to help them profit.
According to FX Street, the EUR/USD rebounded with U.S. equities continuing to decrease. The main reason stocks were on the decline is the fact that technology and consumer shares had poor performances ahead of earnings reports. However, that doesn’t mean this trend will continue, as technology stocks have already begun to rebound.
Following the worst three-day drop since 2011, technology shares such as Google Facebook and EBay all increased more than 2.3 percent, according to Bloomberg. Investors need to keep an eye out for how this impacts the EUR/USD, as this movement could help them better predict market volatility in the future to better predict the forex markets.
“Biotech and tech companies were trading at lofty valuations and they finally succumbed to the gravitational pull,” Mark Luschini, chief investment strategist at Philadelphia-based Janney Montgomery Scott LLC, which oversees $63 billion in assets, told Bloomberg. “A lot of these growth stocks had been taken down 10 to 20 percent, but usually that loss finds a bottom.”
There is no way investors can guarantee certain market movements, but forex traders can use the valuable information made available in the Internet age to help make them ore effective.
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Article provided by HY Markets Forex Blog
