Most people don’t feel it, some aren’t even aware of it but currencies around the world are constantly being exchanged and traded. This oftentimes vicious and continuous cycle is what is know as foreign exchange or forex and trades all the world currencies against each other. The rise and fall of value usually creates investments and opportunities around the world. And to keep track and take advantage of such investments, knowledge of forex charting is indispensable.

Forex occurs between brokers, investors, banks and traders through computers and telephone lines. Forex is a global, 24-hour market with major trading centers in London, New York, Tokyo and Sydney. Forex charting comes in when forex data gathering is needed that leads to wise investment strategies.

Forex charts are crucial for providing and analyzing data on world currencies in specific time periods of minutes, months, even years. All this is dependent on what particular chart you’re using. Each chart package is unique and has specific functions for certain situations that can help a wide variety of investors.

There are several kinds of forex charts. Some of the most popular charts include:

Line Chart- this is a chart where lines are used to represent the exchange rate of a particular currency over a specified period of time and connect the data points.

Point and Figure Chart- this chart uses Xs and Os to mark the changes in the prices of currencies, where the symbols represent rises (X) and falls (O) in price.

Bar Chart- uses bars to represent the performance of a pair of currencies, at set time intervals, such as every hour.

Candlestick Chart Candlestick chart - this is has the most visual detail of all the charts and uses “candlesticks” with a wick at each end to forecast the currency market.

A currency chart can track the trends and behavior of a single or several currencies at the same time. The information they provide is crucial to investors in ensuring that they get the proper information with the appropriate presentation. These are they key to guaranteeing success in the uncertain realm of Foreign Exchange.

Ben Bernanke, Chairman of the US Federal Reserve Bank, rings the forex market bell at a speech he made yesterday at an economic conference in sunny Barcelona Spain. The bold Helicopter Ben Bernanke said the following:

“In collaboration with our colleagues at the Treasury, we continue to carefully monitor developments in foreign exchange markets. The challenges that our economy has faced over the past year or so have generated some downward pressures on the foreign exchange value of the dollar, which have contributed to the unwelcome rise in import prices and consumer price inflation. We are attentive to the implications of changes in the value of the dollar for inflation and inflation expectations and will continue to formulate policy to guard against risks to both parts of our dual mandate, including the risk of erosion in longer-term inflation expectations.

Bernanke continues, “Over time, the Federal Reserve’s commitment to both price stability and maximum sustainable employment and the underlying strengths of the U.S. economy–including flexible markets and robust innovation and productivity–will be key factors ensuring that the dollar remains a strong and stable currency.”

Those of you who are experienced stock traders probably have heard the old trader’s saying that “they don’t ring a bell” to announce market tops, bottoms or significant turning points. However in this instance Mr. Bernanke came as close as you will probably ever see of ringing a bell to let you know the the US has finally seen the errors of its ways in letting the Dollar slide to historic low levels against most currencies.

While one speech will not in itself turn the Dollar around it does serve notice that Dollar bears had best be very careful with their forex positions and that Dollar bulls may be about to gain the upper hand. At least for awhile. Against the Yen the Dollar immediately gained about 125 pips on Bernanke’s comments and the Euro gave up about 100 pips fast. Extremely fast.

Today the Dollar has given back some of yesterday’s gains as forex traders mull over Ben Bernanke’s comments. However, the Dollar looks like it is consolidating and will soon move higher. The big question, of course, is will the Fed stick to its resolve should additional bad economic data continue to be released every month? Should the Fed start to raise rates to help strengthen the Dollar that action would likely ring another bell for the stock market. With the stock market already soft higher interest rates could send it South in a hurry.

Mr. Bernanke and the Fed are in a no win situation. Lower rates will speed up the Dollars decline and higher rates will probably tank the stock market and add to the housing market’s woes. However, with inflation zooming to the upside the forex market will, at least for now, likely listen to the bell ringing by Mr. Bernanke and count on a bit of inflation fighting by the Fed as it attempts to strengthen the Dollar.

Conclusion: The Fed is becoming fearful of an inflation wild beast that it will not be able to control. The FEd looks like it is ready to risk placing further pressure on the US economy by taking steps to fight inflation. The quickest way to do this is by raising interest rates and helping the Dollar to strengthen. Look for a stronger Dollar policy to start kicking in over the next few days and weeks.

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