By: Charley Warady

In the last couple days the Forex fundamental news has shown that the US dollar is strengthening and this will surely affect the EUR/USD Forex pair. I wondered how the Forex signal providers were going to adjust to this news. Generally speaking, they should only react to technical data, so I looked into how they were treating the Forex market late last week.

Signal providers' hits and misses

Last week for the Forex pair EUR/USD, a couple of the Forex signal providers sent out Forex signals to buy into the market and they went fairly well. For instance, IntelliForex signal provider sent out a Forex signal to buy at 1.3785 and they sold it at 1.3817. A nice profit of 32 pips.

However, this week the Forex fundamental experts are saying it is going to be a different story. They're saying that the dollar is strengthening and we're due for a correction. It will be interesting to see how the Forex signal providers handle a reversal if it happens.

On the other hand, Forex signal providers rely heavily on Forex technical analysis, and it's hard to argue with a bullish Forex market that looks like this:

For instance, the Forex signal provider Fx ProSignal Alert (fxprosignalalert.com) tried to take the short side of this Forex pair twice last week and wound up with small losses. And, interestingly enough, the same Forex signal provider took some very nice profits from shorting the Forex pair USD/CHF several times.

What the future holds

If the Forex fundamental news has the effect many analysts are saying the strengthening dollar is going to have, then the Forex technical analysts have to see the possibility of a huge drop. At that point it will be interesting to see how the Forex signal providers handle it.

Admittedly, when considering how the Forex signal providers are going to handle the “inevitable” slide in the market depends greatly on the signal provider's modus operandi and how many pips they aim to take out of the market. However, even if you're dealing with a service that practically scalps, if they're trying to take the wrong side of a trend it could lead to a series of losses.

If the Forex technical market ignores the fundamentals and stays on the upswing, the Forex signal providers will continue to use the same paradigm. As is true in all cases, nothing goes straight up and eventually the EUR/USD pair is going to make its correction. But just like the Forex trader, the signal providers are not going to try to pick tops. When the trend shows itself, they'll be right there.