News or data are always read by the market along the prevailing market bias.
Data can provide a good reading for the state of the market. If the data is bad
but the price is still rising or not affected, it must be a bull market which
means buy on dip strategy is a better one. Conversely, if the data is good but
the price is not rising or even falling, it must be a bear market which means
sell on bounce strategy is a better one. The inflexion point must be when bad
news or good news. no longer affect the prices as they have done before.
Medium/long-term bias changes are usually accompanied by such reactions to the
news. Fwiw. It is not the numbers that counts but how the market reacts to the numbers
that counts. That gives some comfort to those who are not privy to the numbers
already FAIR VALUE Good evening. The concept of fair value in any currency is largely that
of CBers and economists and not much about trading ..Almost always currencies
overshoot from the fair value areas some 20-30% in their medium-term trend and
what makes all hard currencies range in reasonable areas overtime since we had
this floating regime in 1971 must the ability of relevant CBs to control the
currency ranges and their real economy's weakness or strength to support those
ranges. ECB folks were not joking when they said Eur/usd was some 25%
undervalued from the fair value when Eur/Usd was below parity levels two years
ago. Same goes for BOJ when they were saying Yen was some 10-20% overvalued
when it was trading around 100 some three years ago too. That is how these
folks view the markets and try to guide the market. Of course, when US Treasury
folks say "Dollar is still strong" when it is falling, they are
begging the market to sell more Dollars. DIFFERENT CENTERS The first hour after opening in Tokyo
tend to provide the best liquidity of the day and that is when most heavyweight
players try to position their way without having much difficulty for the day. Sydney open is more often used as an ambush hour by
certain players using the time window till Tokyo open. One rule of thumb is when Yen
jumps at Tokyo
open the chances are it will continue throughout the day and a few more days.
On different point, learn to position trade Yen or any other currency if one is
really going to make a big money one day. Fwiw. One hour from Tokyo open, London open and NY open are the times where
most liquidity of the market exist. And that is where market makers are busy
setting the trend for the session or even the day. Your observation has a merit
because most of the session or daily moves are started either in London open or Tokyo
open or NY open. Especially London
Open. Other markets are too thin for any good sized traders to make their
market views felt. Good luck. London is
just a market place where all sorts of Forex folks flock to buy and sell. It
does not have to be London
folks. It could be anyone from anywhere in the world with deep pockets who
start setting the market direction on a given day. Same goes for NY and Tokyo sessions markets. In
any case, Tokyo and NY still relatively small
markets when compared to London
as far as Forex goes.
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