With just an increase in U.S. debt yields, global currencies were significantly affected – not just the U.S. dollar. This caused a major forex pivot point with regards to most all currency pairs. As mentioned in a recent Reuters article (published August 22, 2013); the reason for such a global impact is “emerging markets, which rely heavily on cheap dollars to fund large current account deficits, were hit hard by the rise in Treasury yields.” This shows that when a forex pivot point occurs concerning the dollar, then there is often a very real economic impact on many nations.
Forex pivot points: Pivot points are indicators developed by floor traders in the commodities market to determine potential turning points, which are also known as “pivots”.
Forex pivot points are calculated to determine levels in which the market could change from “optimistic” to “pessimistic” Forex currency traders see pivot points as markers of support and resistance.