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Originally Posted by olimits7
One thing I don't understand since the USD interest rate increased, why did USD get stronger? I thought when interest rates increase the USD would weaken. Can someone please explain this?
Thank you,
olimits7
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olimits7
The question is why did you think "USD will weaken on rate increase"?
There is no simple answer to the question, how intra day, intra week currency prices react to these types of "fundamental" events.
To understand this you have to be able to read the complete story line and pick up on the short term "sentiment". Reading the storyline is like watching a soapie. You don't have to watch everything but you can't afford to miss certain episodes.
Some of my subscribers actually thought I made a mistake when I made this call around London opening:
drforex > I think some more downside, today, tomorrow before somewhat of an uptick in currencies before easter weekend, wednesday NY and Thursday
:drforex > that if fed make 25 points and leave 'measured' in place or slightly adjust it
The point is that to do complete analysis, what i call relational analysis (or realtime analysis) you must consistently relate price (and price movement), time (elapse of) and events (discounting of). If you do this, well you are much less surprised by "funny" market moves.
Then, coming to think of it, I actually mainly based it on :
:drforex > OK, based on very rudimentary application of fractal geometrics, today is likely to be also pretty volatile
:drforex > i.e big moves, in this case probably further south ...