Monday morning open levels – indicative forex prices – 31 October 2022

Good morning, afternoon or evening to all ForexLive traders and welcome to the start of the new FX week!

On a Monday morning, market liquidity
Liquidity

Liquidity refers to the extent of a financial instrument’s ability to be bought or sold without causing price fluctuations. Thus, if an asset is extremely liquid, it means one can trade that asset in the knowledge that one’s specific dealing won’t create significant movements in the market.This is because there exists such a large number of traders going both long and short, generating huge volume for that particular asset. Liquidity in the FX MarketTake the example of the foreign exchange market – it is the world’s most liquid market, since numerous banks, hedge funds and individual traders partake in the buying and selling of vast cumulative amounts currencies every single day. In fact, over $5 trillion is exchanged daily, as mentioned by the Bank of International Settlements. If a trader wants to go long on the currency pair EUR/USD, they will have no trouble in finding traders wanting to go the opposite way, due to such ample liquidity.  The EUR/USD is the world’s most liquid trading instrument, in any market. It is extremely easily bought or sold, with an immense quantity of trading activity for the pair.  Liquidity reflects the quantity and the frequency of the asset that’s being traded, i.e. the more an asset is traded, the more liquid that asset is, making it virtually effortless for the asset to be bought and sold.Likewise, the less an asset is traded, generally the less liquid the asset is, making it more difficult for that asset to be bought or sold. It goes without saying that liquidity is one of the key attributes a trader looks for, when deciding on whether to pursue trading an instrument, since it tells the trader how stable a market is despite masses of trades being undertaken. This is exactly why the forex market is so enticing, since its liquid environment allows massive trading volumes to occur without much effect on the currency pairs’ exchange rates.

Liquidity refers to the extent of a financial instrument’s ability to be bought or sold without causing price fluctuations. Thus, if an asset is extremely liquid, it means one can trade that asset in the knowledge that one’s specific dealing won’t create significant movements in the market.This is because there exists such a large number of traders going both long and short, generating huge volume for that particular asset. Liquidity in the FX MarketTake the example of the foreign exchange market – it is the world’s most liquid market, since numerous banks, hedge funds and individual traders partake in the buying and selling of vast cumulative amounts currencies every single day. In fact, over $5 trillion is exchanged daily, as mentioned by the Bank of International Settlements. If a trader wants to go long on the currency pair EUR/USD, they will have no trouble in finding traders wanting to go the opposite way, due to such ample liquidity.  The EUR/USD is the world’s most liquid trading instrument, in any market. It is extremely easily bought or sold, with an immense quantity of trading activity for the pair.  Liquidity reflects the quantity and the frequency of the asset that’s being traded, i.e. the more an asset is traded, the more liquid that asset is, making it virtually effortless for the asset to be bought and sold.Likewise, the less an asset is traded, generally the less liquid the asset is, making it more difficult for that asset to be bought or sold. It goes without saying that liquidity is one of the key attributes a trader looks for, when deciding on whether to pursue trading an instrument, since it tells the trader how stable a market is despite masses of trades being undertaken. This is exactly why the forex market is so enticing, since its liquid environment allows massive trading volumes to occur without much effect on the currency pairs’ exchange rates.
Read this Term is very thin until it improves as more Asian centres come online.

As usual for an early Asia Monday morning, prices are liable to swing around on not too much at all, so take care out there.

Levels guide, the USD is up (there is a piece in the Wall Street Journal (gated) from Fed ‘insider’ Timiraos hinting at higher rates for longer from the Federal Reserve
Federal Reserve

The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the US while buttressing a financial system for the country. Its general duties are setting and guiding monetary policy and overseeing effective economic operation, both of which are at the service of the public interest.How the Federal Reserve Affects ForexThe Fed can materially impact the US dollar by virtue of the interest rate it sets, measured by the Board of Governors of the Federal Reserve System. The current interest rate and the expectations of future interest rate changes can influence the value of the US Dollar. For example, if traders anticipate a change in interest rates based on announcements from the Board of Governors, this can cause the US dollar to appreciate or depreciate in value against other currencies.Forex traders should always be aware of meetings and announcements from the Fed and should keep track of developments within the central bank.Ultimately, the Federal Open Market Committee (FOMC) holds eight regular meetings per calendar year, where policies and interest rates are discussed and agreed upon. The best course of action is to keep up with news ahead of these meetings as a forex trader to make predictions about interest rates, and whether to buy or sell the US dollar.

The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the US while buttressing a financial system for the country. Its general duties are setting and guiding monetary policy and overseeing effective economic operation, both of which are at the service of the public interest.How the Federal Reserve Affects ForexThe Fed can materially impact the US dollar by virtue of the interest rate it sets, measured by the Board of Governors of the Federal Reserve System. The current interest rate and the expectations of future interest rate changes can influence the value of the US Dollar. For example, if traders anticipate a change in interest rates based on announcements from the Board of Governors, this can cause the US dollar to appreciate or depreciate in value against other currencies.Forex traders should always be aware of meetings and announcements from the Fed and should keep track of developments within the central bank.Ultimately, the Federal Open Market Committee (FOMC) holds eight regular meetings per calendar year, where policies and interest rates are discussed and agreed upon. The best course of action is to keep up with news ahead of these meetings as a forex trader to make predictions about interest rates, and whether to buy or sell the US dollar.
Read this Term – I’ll have more to come on this separately :

EUR/USD 0.9948
USD/JPY 147.69
GBP/USD 1.1556
USD/CHF 0.9973
USD/CAD 1.3615
AUD/USD 0.6396
NZD/USD 0.5792