Question

In terms of the approaches to exchange rate forecasting, which of the following is based on the premise that there are analyzable market trends and waves and that previous trends and waves can be used to predict future trends and waves?

a. chart analysis
b. technical analysis
c. behavioral equilibrium model
d. fundamental analvsis
e. port folio balance model

Answer 1

The correct answer is the option B: technical analysis.

Step-by-step explanation:

First of all, in trading, technical analysis is the name given to the term that receives the discipline that evaluate investments and that its major purpose is to identify trading opportunities based on the fact of analyzing statical trends, such as price movement.

Secondly, this type of trading focuses on patterns and any type of analitycal charting tools to that help the evaluation of a security's strength or weakness in order to encourage the person to trade or not doing it. In addition to that, the technical analysis is based on historical trading data so therefore it is understandable that this type of analysis is based on the premise that there are analyzable market trends and waves and that previous trends and waves can be used to predict future trends and waves as well.