FACTORS THAT AFFECT FOREIGN EXCHANGEA country's currency is affected by, political conditions. natural disasters, man-made disasters and market psychology. Now i won't get into any detail about the first three because i think those are pretty self explanatory to the standard trader but i will write a little about the latter (market psychology)......................................................................................................................................................................................MARKET PSYCHOLOGY:   What is Market Psychology ? you ask
The foreign exchange market, like every other market in the world, is influenced by human emotion. Market psychology
has long been known about. It refers to the sudden or prolonged
trading decisions that are mainly driven by emotional rather than solid facts. Bullish and bearish trading are two of the most commonly referenced
market psychologies. A bull market is one in which optimism reigns:
prices generally rise as traders believe in the underlying health of an
economy or national currency. A bear market is one in which pessimism
takes hold: prices tend to fall as traders come to believe an economy or
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