How Long Can A Fx Trend Last?

How long can a fx trend last? Or, will the trends in the Fx market Last? Well, these are certainly the big questions in fx trading.

On an exceptionally active day in the fx, some currency pairs can lag their peers in terms of volatility. It is normal to see certain currency pair under pressure while other currency pairs climbing to new highs. Generally, the lack of volatility and quiet trading often represent the calm before the storm. With the breakout moves following, the big question remains unanswered that how long can a fx trend last?

The velocity of the move is different depending upon the pair in question. Let us follow an example.

Take dollar for instance. Let’s say that it has virtually remained unchanged against the euro, but stronger against the Japanese Yen, Swiss Franc, Canadian and New Zealand dollars but weaker against the British pound and Australian dollar. This situation suggests for some currencies at least that the upside momentum may be waning, particularly if they are trading well off their highs. This does not reflect that the dollar weakness is over. Moreover, you may yet have to hear about any convincing verbal or physically intervention from foreign central banks. And unless the intervention actually happens, the trends in the forex market could last for more time. Any new piece of economic data on the calendar could threaten the downtrend in the dollar. If the strong demand for dollars continues then it could lend support to the currency. But if foreigners become net sellers of dollars, this could accelerate the weakness in dollar. One will have to keep a close watch.

With the example given above, you can get a rough idea on the lasting of a trend in Fx trading online.