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Technical analysis of foreign exchange investment: fluctuations and trends of euro and dollar

2023-12-20

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In the foreign exchange market, technical analysis is an analysis method that predicts future price trends by studying market data such as price trends and trading volumes. This article will take the technical analysis of Euro and US dollars in foreign exchange investment as an example to discuss how to use technical analysis tools to grasp market fluctuations and trends.

1. Basic principles of technical analysis

The basic principle of technical analysis is that market prices reflect all information and prices move according to trends. A trend is when prices continue to move in a certain direction over a period of time. Based on this principle, technical analysts look for trends and predict future price movements by studying historical price and trading volume data.

2. Technical analysis of Euro and US dollar

Chart type selection

In the technical analysis of the Euro and the US dollar, commonly used chart types include K-line charts, bar charts, and line charts. Among them, the K-line chart is more commonly used because it can simultaneously reflect the four key price information of the opening price, closing price, highest price and lowest price.

Trend identification

In EURUSD charts, trends are usually divided into uptrends, downtrends, and sideways trends. An upward trend is represented by a series of positive lines, and the closing price is higher than the closing price of the previous trading day; a downward trend is represented by a series of negative lines, and the closing price is lower than the closing price of the previous trading day; a horizontal trend is represented by a Yin and Yang line They appear staggered and the price fluctuates within a certain range.

Support and resistance level analysis

Support and resistance levels are important concepts in technical analysis. The support level refers to the area at a certain price level where the buyer's power is enough to prevent the price from continuing to fall; the resistance level refers to the area at a certain price level where the seller's power is enough to prevent the price from continuing to rise. By identifying support and resistance levels, investors can determine the likelihood of a price pullback and the likelihood of a reversal.

Transaction volume analysis

Trading volume is one of the important factors in technical analysis. It reflects the activity level of market participants and the strength balance between buyers and sellers. On the EURUSD chart, an increase in trading volume usually means that market participants are paying more attention to the market and there is a greater likelihood of price movement.

3. Investment advice

Through the above technical analysis, we recommend that investors should pay attention to the following aspects when investing in the euro and US dollars: first, pay attention to the trend and follow the trend; second, pay attention to the breakthrough of the support and resistance levels to judge the price correction and reaction. The possibility of a reversal; finally, combine transaction volume data and changes in market sentiment to formulate a reasonable investment strategy.

In short, foreign exchange investment technical analysis is an effective market prediction method. By studying the technical data of the Euro and the US dollar, investors can grasp market fluctuations and trends, formulate reasonable investment strategies and control risks.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

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Technical analysis of foreign exchange investment: fluctuations and trends of euro and dollar

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