Quote from binar:
Fellow Forum Members,
Why did the EUR/USD (in the H4 trading timeframe) shoot up like a rocket this morning upon release of the Pending Home Sales m/m news? I'm confused about this because the news was in favor of the USD (the forecast was for 0.1% and the Actual turned out to be 3.2%, good news for the US economy).
My thinking is as follows: since the EUR is the base currency and the USD is the quote currency, shouldn't news that favors the quote currency cause the base currency to drop like a rock? Instead, I looked on in dismay as the EUR price shot up like a rocket. In addition, I noticed that the pairs shown below where the USD is the quote currency also had base currencies with prices that shot up like a rocket upon release of this news:
EUR/USD
GBP/USD
AUS/USD
Alternatively, the pairs shown below where the USD is in the base currency position, the price fell down like a lead ball for the USD:
USD/JPY
USD/CHF
I would appreciate any opinions on this matter. I am totally confused, and I want to make sense out of all this because I'm planning on doing some trading based on news releases and I want to make sure I follow the correct logic as to how news impacts the base currency in relation to the quote currency. Any info will be greatly appreciated. Thanks.
