If the current exchange rate of the EUR/USD pair is 1.1200, this means that one euro costs $1.12, or that it takes $1.12 to buy one euro. There are eight major currencies in the Forex market:Īll those currencies are traded in pairs, with the current exchange rate reflecting the price of the base currency (first currency) in terms of the counter currency (second currency.) How to Read Currency Chartsīefore we dig deeper into how to use a Forex currency strength indicator, let’s quickly cover the basics. But, how to know which currencies will fall or rise in the coming period? Traders use various strategies to get an answer to that question, and a Forex currency strength meter can also help in achieving that goal. In both cases, Forex traders make a profit on the difference between their entry and exit prices. When short-selling, traders borrow a currency at a higher price, sell it, wait for the price to fall and re-purchase the currency to return the loan. Just like stock traders, Forex traders aim to buy a currency cheap and sell it later at a higher price. Most fluctuations of major pairs are in the ☑% range, and traders try to take advantage of those small price-changes by utilising leverage. Unlike stocks, currencies don’t fluctuate much on a daily basis.
