Friday, 30 December 2011

2011 Forex Markets Review

The year end of 2011 is coming. By the time of writing, the US market is nearly closed, I believe lots of traders and investors have already been on holiday or close their position early. They may spend sometime to summarized gain and loss in 2011. Overall, 2011 is not a quite year; there are many changes, big events in either the real world or the financial world. The forex market is very volatile as well. In another way, it is a good year for forex traders (at least for these traders who made money).

Let us look back at some major currency pairs (You can find more information on here); I will try to explain what was happened in these pairs this year.

This pair within this year has been lots of more lively due to the Euro zone crisis. The currency price is very close with the crisis; we can guess the trend of EUR for next day just by watching the crisis news today. The yearly trading range is more than 2000 points. In the first 5 months, the trend was going up and the trend was very clear to everyone. I believe some of the readers may simile because they have made some good profit. However, there were lots of uncertainties in the following 3 months (May to August), that’s why there are a lot of sideways price actions.

Within the recent 2 or 3 months, the downward trend is very clear to traders. It is getting close to the low that was posted at the start of the year. Basically, the price of EUR did not change within this year. I think it will still very hard to trade as we are still at the mercy of the European politicians. Hope all of them have a good holiday and generate some good regulations in 2012.

Let us have a look the EURUSD chart in 2011

For the GBPUSD chart, you can very easily to see the price is now pretty much back where it started back in January 2011. The highest price was happened in April and was around 1.6747. Then it has been trading sideways for the following of the year without a clear trend. Since the news of Euro Zone crisis came out in SEP and OCT, the GBP price became slightly lower, but it did not make a trend.

For the traders who trade this pair did not have a good year as the daily trading range was very small comparing with previous years. Let us have an indicator – Average True range (ATR). The highest value this year is about 150, but we can find 200 in previous years. The current value is about 110 points which is not very good.

The chart of GBPUSD in 2011
We can see the clear trend of this year from the chart below. This pair was actually very lively in the first six months, and then it seems to be forming a solid base from which to build within the second half year.

It is now looking as if it is finally going to break upwards out of this range, but it certainly hasn't been easy to trade in the meantime because the average daily trading range has been less than 70 points for large parts of the year (at the moment it's just 37 points), and there has been no real trend in recent months.

The chart of USDJPY in 2011

Australia economic overall was quite good because of its commodities and metals. The high demanding from developing countries in the first 4 months has pushed AUD to a record high around 1.1000. The entire world was surprised about Australian economic at the time. However, since the global economic became slower down and the outlook of economic in developing countries became unclear. The AUD has dropped back a little bit. In the second half year, the volatility of AUD has increased a lot.

Overall, the current AUD price is still higher than the beginner of the year. The chart is showing as following:
As I said at the beginning of this article, 2011 is a challenging year for many forex traders including myself. Most of traders prefer trading within a trading market; however, we can not see any real trends at the moment. I can hope the Euro Zone crisis will be resolved in the coming months, and all the major elections in 2012 will not give any big impacts to the financial world.

1 comment:

  1. Informative article, just what I was looking for. Thank you so much for taking the time for you personally to share such a nice info.
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