usually happens when a country raises interest rates (attracting investors) or shows strong GDP growth.
The second currency (USD) is what you use to settle the bill.If you think the Euro will get stronger or the Dollar will get weaker, you Buy (Go Long). If you think the opposite, you Sell (Go Short). 2. The Psychology of the Trade
The first currency (EUR) is the "basis" for the trade. buying versus selling currency
This is an act of faith . You are betting on the growth, stability, or rising interest rates of a specific nation’s economy. You want to hold that "asset" because you believe its value will appreciate.
Buying is an investment in a country's future; selling is a bet on its relative decline or a move toward a more stable harbor. usually happens when a country raises interest rates
often occurs during political instability, "safe haven" flows (selling risky currencies to buy Gold or USD), or when a central bank prints more money (inflation).
The price at which the market is ready to buy from you (always lower). You are betting on the growth, stability, or
The price at which the market will sell to you (always higher).The gap between them is the "Spread." This is the friction of the market—the "tax" you pay to the house for the privilege of trading. 4. The Macro View