While Brexit seems to be doing a number on the Pound Sterling, and with the G20 summit putting pressure on all major currencies, Forex traders are entering 2019 with a number of new challenges and possibilities. With a global growth slow-down from 3.2% in 2018 to 3.1% in 2019 predicted, traders will need to keep a close eye on their currency pairs. Successful Forex traders know that an emotional response to an event has the potential to derail any investment strategy, and the trick is to know which Forex trends to follow instead.
Follow Political And Economical Markers
As a trader, one of the most rewarding things about trading Forex is watching strategies play out, as political and economic principles affect currency pairs. For instance, major currency pairs such as USD/EUR and GBP/EUR will have to weather upheaval thanks to Brexit, as the Italian 2019 budget also affects the currency pairs. Knowing whether the budget is favorable or not will prove to be a handy strategic tool, as it will provide traders with the insight of whether to go with or against a currency. Those who had their money on the EUR in these pairs had the opportunity to bank on the upswing as the news was welcomed in the Eurozone.
Other political markers that will have a great effect on global currencies include the disruption in the Malaysian monarchy for those who dabble in Asian currency pairs. Traders will want to keep a close eye on political unrest in countries such as Zimbabwe if they had hopes that the Zimbabwean dollar would be on the rise after the ousting of long-standing president, Robert Mugabe.
Alternative Investment Strategies For Forex In 2019
Those who may not wish to trade Forex directly but want to get the most out of the funds should look into investment opportunities: ConnectFX.Org has a nice list of brokers offering managed accounts, for example. Managed funds allow investors to expand their portfolios thanks to Forex, even if the investment itself is not a Forex transaction. Another method to invest for those who are not too familiar with Forex is with the help of a robo advisor. While these became known to investors towards mid-2018, they really only started gaining momentum towards the end of the year. Robo investors are said to become an essential part of investing for 2019.
Check Lead Indicators To Spot Trends For 2019
The best lead indicator to check for US-based traders (and even others around the globe) is the US Dollar Index (DXC). With this index, traders can constantly see where the USD is in relation to other major currencies. For traders, the mission is to trade at levels above the DXC in order to make a profit. Some of the currency pairs earmarked to be the ones to watch in 2019 include USD/JPY, USD/CAD, and USD/CHF.
2019 is bound to be an interesting year for traders, as the European leadership possibly sees a change of hands, while trade wars between China and the US continue. For Forex traders, keeping a finger on the pulse is integral to a great trading strategy.
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