MARKET SENTIMENT IN FOREX TRADING

26.11.2020
Forex 101
Sentiment is feeling. In the context of FOREX, feelings about a currency are formed by various factors. The syllabus of this book slightly distinguishes sentiment from the fundamental, but does not directly separate these two elements.Good fundamentals, such as a thriving economy as well as a strong monetary policy, formed the sentiment of investors to buy the currency. But, the sentiment to be peeled in this topic is, sentiment which is not in the FOREX economic calendar.CRISIS THAT AFFECT THE CURRENCYGeopolitics, crises, disasters, safe-haven status and more are examples of sentiment. It is important that once we understand the fundamental situation, we also need to examine what sentiments are likely to disrupt the volatility of the currency.BREXIT, THE GEOPOLITICAL ISSUE.Each currency has its own sentiments. For example, one of the current biggest sentiment that could influence the movement of currency values on a large scale is the BREXIT sentiment.BREXIT sentiment is the geopolitical crisis that hit the European zone when the people of the United Kingdom chose to separate their country from the European Union. The crisis, which started in 2016, is now entering its final phase where on March 29, 2019, the UK officially left the EU.Certainly the impact of currency price movements involving either the euro or the pound sterling will be affected. Sentimentally, negative impact will occur on both currencies. This expectation was made by many parties, including the governor of the Bank of England himself who expected the negative impact to hit the economy and in turn impact the value of the pound sterling.It is important that we always get the latest information on the crises that hit as additional information to help us make better trading decisions.