The Oil Crisis
As a trader in the currency exchange, you probably keep up with world events. And chances are you’ve read about the crisis in several regions including the North of Africa and the Middle East. A negative development in such oil producing areas may turn into an oil crisis. And as you know, this definitely affects the Forex.
But you’ve probably also observed that a situation doesn’t have to develop into a crisis to affect currency behavior. Speculations of any sort may bring on risk aversion and move the monetary units into a particular direction. The mere thought of interruption in oil deliveries can cause havoc in the markets. From ECU to gold standard and crude oil inventories, anything can have a drastic effect on currency prices. A substantial rise in inventories in the U.S. for example, may cause the Canadian Dollar to weaken.
The reason we’re telling you this, is that as a trader in the foreign currency exchange, you need to understand the importance of keeping up with global events. Crude oil is not just a product for commodity trading individuals. It’s a market mover, a player without a face but with great influence.
Thus, you may enjoy performing technical analysis. But with so much going on in the world, it’s in your best interest to learn as much as you can about fundamentals and how they exert their influence. Knowing about fundamentals that affect the Aussie will lead you to very profitable trades.
Tags: commodity trading, crude oil, currency, currency exchange, foreign currency exchange, forex, fundamentals, gold, oil, profitable, Technical Analysis