The skills of economic data analysis for the foreign exchange trading

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1. Trend


Economic data also has a trend of development. For example, the US trade deficit has maintained an upward trend in recent years. After 2005, it has remained high and fluctuated, but there is still no sign of weakening. This indicates that the US trade deficit is likely to continue to increase. When forecasting economic data, we must also pay attention to taking advantage of the trend.


2. Stability


Any important economic data, once stabilized, its influence will be significantly reduced. The most classic case is the data on the number of people applying for unemployment benefits for the first time in the United States every week.


Between July 2003, due to the slowdown in economic growth and the war in Iraq, the number of people applying for unemployment benefits for the first time in the United States has been higher than 400,000. This data shows that the US economy still shows no signs of recovery, which has led to the outflow of international hot money. There was a lot of pressure on the US dollar. At that time, almost no four US released the data that could cause the US dollar to fall.


After July 2003, as the number of people applying for unemployment benefits for the first time in the United States fell below 400,000 for the first time, the data quickly returned to about 350,000 in the next few months, indicating the relative stability of the US job market. Just after that, the influence of the data plummeted, especially after 2005, the number of first-time jobless claims in the United States has hardly caused obvious short-term fluctuations in the market.


3. Does the market show signs of continuous compression?


Some particularly important economic data, which the market pays special attention to, and the expected very unclear economic data, can often lead to a continuous lack of trading enthusiasm in the market before the release, and cause most currencies to fluctuate slightly for a long time. This situation is called "continuous compression" sign".


When such signs of continuous compression appear, it often indicates that once the data is released, it may trigger a very fierce market, and this short-term market has almost no short-term repetition. After choosing the direction of the breakthrough, it can trigger a market of about 200 points in a short time. When we are operating, after discovering this "sign of continuous compression", we can completely try to grasp the low-risk data market.


The above is organized and released by EC Markets.

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