Tips: How to Analyze Currency Movement According to Market Expectations?

Forex traders often look at economic data to anticipate the movement of currency values ​​or currency pairs. However, many do not know that the forex market is also moving according to market expectations.

When expectations for a currency are positive in the future, we often see that the currency will strengthen. Conversely, the currency is difficult to strengthen if the market expectations of the currency are negative.

Fundamental factors are very important for us to see the movement of the currency in the long run. Similarly, the sentiment is important for us to determine the movement of the currency in the shorter term.

We need to determine the fundamentals and current sentiment of the currency so that we can know the market's tendency to move up or down.

We give simple examples according to the current situation.

The situation is political development in New Zealand.

The market is currently less confident in the development of politics and policy in New Zealand. This actually forms a negative expectation of investment returns in the country.


With the expectation of relatively risky investments moreover, the new New Zealand Government wants to add to the mandate of ‘additional employment in the economy’, in fact indicating a monetary policy that is more prone to easing in the future.

Due to these expectations, the NZD or Kiwi is more likely to move downwards and in fact, we have seen the NZD fall since last week on Thursday (October 19). To this day the trend of this currency is still judged to be moving downwards.

That is how the forex market moves according to market expectations as a whole. This can also be seen in the important economic data released.

However, if you do not understand the basics of fundamental and technical analysis, it is actually difficult for you to understand what the market expects at a time.