An Analytical Tool for Forex Transaction

Iman Gunadi, Apsari Dharmesti and Aghnia Yurizkanti

No 10403, EcoMod2017 from EcoMod

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.

Keywords: Brazil; India; Indonesia; Malaysia; Philippines; Russia; Thailand; Turkey; Finance; Forecasting; nowcasting (search for similar items in EconPapers)
JEL-codes: E44 E47 F31 F37 G11 (search for similar items in EconPapers)
Date: 2017-07-04
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