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An Analytical Tool for Forex Transaction

Author

Listed:
  • Iman Gunadi
  • Apsari Dharmesti
  • Aghnia Yurizkanti

Abstract

Predicting currency movement is very important for investors who face exchange rate risks in their investments. Unfortunately, the most of existing tools that are used as a guidance do not contain any information about the future. Most existing tools use past performance in predicting thresholds or support and resistance levels. They do not take into account investors' reviews on economic forecasts or market dealers' sense in predicting market events. To fill this gap, this study try to build an alternative analytical tool to set support and resistance levels that is more consistent with economic and market forecasts or outlooks. This study use some simulation analyses and comparative studies using several countries data and then combine those data with some market analyst reviews related to those countries to produce a new analytical tool. Using data from 2014 until 2016, the study found that the new analytical tool performs better than existing tools. Therefore, it can be used as a more appropriate guidance for investors for reducing currency risk in their investments.

Suggested Citation

  • Iman Gunadi & Apsari Dharmesti & Aghnia Yurizkanti, 2017. "An Analytical Tool for Forex Transaction," EcoMod2017 10403, EcoMod.
    • Handle: RePEc:ekd:010027:10403
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    File URL: http://ecomod.net/system/files/Iman%2C%20Apsari%2C%20Aghnia%20-%20Ecomod%201017.pdf
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    More about this item

    Keywords

    Brazil; India; Indonesia; Malaysia; Philippines; Russia; Thailand; Turkey; Finance; Forecasting; nowcasting;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F37 - International Economics - - International Finance - - - International Finance Forecasting and Simulation: Models and Applications
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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