Currency Markets: Pivot Point Charts in Technical Analysis

Currency markets are quickly rising in popularity and technical chart analysis is one of the best ways for traders to gain an edge and achieve consistent profits. According to Ask Traders, pivot point trading strategies can help to outline support and resistance levels on price charts that can be used to define a market position.

Technical analysis trading strategies can be a great way to enhance traditional strategies that rely on fundamental analysis. For example, before trading with the U.S. dollar versus the Argentine peso (USD/ARS) it would be a good idea to have a sense of what is happening in both economies.

While Argentina has one of the largest economies in South America, there have been financial issues in recent years that could affect the trade. Argentina’s economy is known to be a somewhat unbalanced economy but the country has a lot of fertile land, making it suitable for agricultural practices. The economy might not in a strong position currently, but this has not always been the case because there have been significant periods of economic stability. However, this is often followed by instability, and this is a trend that has gone on for many years.

When the last president of Argentina came into power, there were hopes of ending the trend because there were many strategies outlined that to improve the economy. Fast forward four years and the problems seem to be worse than they were previously. But now that a new government is in place currently, hopes are elevated for this period of time.

There are different types of economies and different countries operate different systems. Argentina operates a mixed economy system, where individuals have the freedom to operate a business in conjunction with the law. Additionally, the government will have a hand in planning central systems and regulating the country. This has given rise to a focus on energy production in the region. With energy being one of the main concerns in the world, clean energy will probably be a requirement in the future and this can also help to improve the economic situation of the country.

Features of the Economy

Different factors contribute to the success or failure of a country’s economy. In the case of Argentina, one of the main factors that determine its economic state is the performance of various sectors. Different sectors in the Argentine economy contribute to the GDP and economic state of the nation, and the major sectors include:

  • Natural resources: Many countries are blessed with natural resources and this has proven to be a source of wealth through history. In many countries, natural resources contribute significantly to the nation’s GDP. This is usually thanks to the current state of the international market as well as market prices. Argentina has several natural resources including oil and gas. They have many metal ore including silver. These are valuable commodities in the current international market. Natural resources contribute approximately 4% to the GDP of Argentina.
  • Agriculture: Agriculture is one of the oldest practices in the world but it is still a significant contributor to GDP. With plenty of fertile land, Argentina is one of the largest Agricultural producers in the world. Agriculture produces about 9% of the GDP for the nation. Some notable products of agriculture exported include beef, maize, soya beans, and wheat. There is a high demand for some of these products, making it valuable in the market.
  • Manufacturing: Manufacturing is a very important feature in today’s market. With high gadget usage in automobiles, manufacturing is valuable. Pharmaceuticals, cars, heavy machinery, and many home appliances are made, as well. Most of these items are essential in homes and as such, there is a market for them. With demands increasing, it simply serves to profit manufacturers.
  • Services: Tourism has become a major source of income for many nations in the world today. With more people seeking cultural and traditional nations to visit, tourists have increased. Argentina offers tourist sites, so whether it’s for a vacation or research, people visit Argentina. There are other services offered in the country that contribute to the GDP. Some services include; the baking sector, transportation, and communication. All these services are well developed improving their total output. The service industry contributes the largest to the GDP, with about 60% contribution.

There are several problems associated with the Argentine economy. While the country seems to have diversity in income sources, the economy is not strong enough. Some of these problems are domestic, rising within the country, while others are external. Regardless of the cause, these problems plague the nation and unsettle the economy. Some of the common problems in the Argentine economy include:

  • Inflation: A devaluation in 2002 was believed to be the right step to solve avoid inflation. This has not been the case as the country has continued to have inflation. The inflation in the country has risen beyond 13%, one of its highest figures post-2002. The high inflation rates have led to the devaluation of the Argentina pesos. There have been efforts by the government to reduce inflation but this has only increased the figure. The reduction of subsidies in an attempt to end the fiscal deficit has only led to price hikes.
  • Economic activities: Argentina’s economy has been affected by the progress of economic activities. Some major sectors in the country have faced challenges beyond their control. A nationwide drought meant a reduction in the agricultural output of the nation. Agriculture plays a key role in the economy, and it has caused many negative defects. The decline in the overall state of economic activities has been constant. As a result, many people are suggesting that the country is headed for a depression.
  • Unemployment: With a well-educated population, it is expected that Argentina will have a low unemployment rate. This is not the case, as there is a significant percentage of the population unemployed. This has also led to an increase in the poverty ratio of the country. While the government has tried to solve this, there has been little success so far because Argentina has an unemployment rate of about 10%.