Experienced forex traders know that economic data is one of the core factors driving currency pair fluctuations. In fact, over 70% of exchange rate volatility stems from the release of economic data. Therefore, mastering economic data trading is akin to unlocking the wealth secrets of the forex market!
After registering and logging into your Finlogix account, users can immediately unlock advanced features of the economic calendar, designed for in-depth analysis of data trends. Today, let’s explore these powerful tools together!
Historical Price Charts
First, we have the price movement charts for commodities following data releases. These charts reflect the price trends of a specified commodity over a period after the last data announcement.
For instance, consider the final GDP figure released by the U.S. on September 27, 2024. Within one hour of the data release, the EUR/USD exchange rate experienced significant volatility. Notably, within the first minute after the announcement, the EUR/USD even saw a downward gap. After a brief dip and recovery, the EUR/USD continued to decline from 1.11632, reaching a maximum drop of 26 pips, ultimately settling at 1.11459. The fluctuation was 0.1549%, and generally, if the EUR/USD fluctuates more than 0.1% within an hour, it indicates that the data has a significant impact on the pair.
Of course, you can also view the trends of different commodities. Simply enter and select the commodity in the upper left corner of the chart to adjust it accordingly. It’s important to note that changing the commodity will also affect the functionality of the two other features below.
Additionally, you can change the date of the data release. For example, the last release of U.S. GDP was on June 28. After adjusting, you can see that after the June 28 GDP announcement, the USD/JPY fluctuated back and forth, resulting in minimal movement, far below 0.1%.
Through these charts, traders can easily view the historical trends of various forex pairs influenced by different data, using this information as a reference to learn how to navigate data-driven markets!
Data Trend Statistics
For quantitative traders and analysts, rather than focusing solely on the recent historical performance after data releases, there’s a desire to broaden the sample size to find connections between data announcements and short-term price movements, summarizing patterns and formulating strict trading rules. This is where Finlogix’s data trend statistics feature comes into play.
Let’s again take the EUR/USD as an example. Which has a greater impact on the EUR/USD exchange rate: U.S. GDP data or inflation rate data?
What does it mean for data to have an impact? It means that when the announced value deviates from expectations, and there’s a clear directional movement accompanied by higher-than-usual volatility, the data can be considered influential.
Inflation, on the other hand, shows a starkly different relationship. When inflation is below expectations, there’s an 80% probability that the EUR/USD will rise within an hour, with volatility reaching 0.33%, three times the usual level. This indicates that inflation significantly influences the EUR/USD exchange rate. When U.S. inflation is high, the EUR/USD exchange rate declines; when U.S. inflation is low, the EUR/USD rises.
With this information, traders can focus on the performance of critical data (like inflation), free from noisy signals. Quantitative traders can also assign greater weight to important data, yielding a price model that closely reflects the real market.
Long-Term Trend Comparison
For long-term investors or holders, the price movements following data releases may not be as crucial. Instead, they focus on whether changes in data trends can influence long-term asset price performance and the relationship between the two.
Let’s consider the price of gold and the U.S. inflation rate.
Many say that gold is an inflation hedge; during periods of high inflation, gold prices rise quickly, making it a good choice for protecting against inflation. However, the chart clearly shows that there’s a notable inverse relationship between inflation rates and gold prices. When inflation is high (such as in 2021-2022), gold actually rises slowly; conversely, when inflation decreases (in 2023), gold prices surge. This is because high inflation typically leads to high-interest rates, which can limit gold price gains. Since 1990, gold has not been an effective inflation hedge. Many traders have made erroneous judgments without comparing the two, resulting in significant losses.
With the long-term comparison feature in the Finlogix economic calendar, traders can easily identify patterns in data, no longer blinded by so-called "truths." Truly understanding the financial market dynamics enables more rational trading decisions!
Free Unlocking of Finlogix Economic Calendar Advanced Features in Just 4 Steps:
- Log in to the Finlogix website and click the "Register" button in the top right corner.
- Fill in your personal information in the pop-up window and click "Register."
- Receive the verification code in your registered email and enter it in the pop-up.
- Congratulations! You’ve unlocked the advanced features. Click on "Tools" in the top left corner and select "Economic Calendar" to start using it.
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Author Peter Pan
Peter Pan is an experienced trader and Market Analyst at ACY Securities. Focusing on trading education, he has helped thousands of new traders build up their trading knowledge and strategies. His deep understanding of market sentiment and time-honed skills are essential to catch price action opportunities.