How to Read Forex Quotes
The forex rates are usually expressed as five-digit numbers. For example, USDJPY =
121.44 means that 1 US dollar is valued at 121.44 Japanese yens (i.e. they are
willing to pay you that many yens for one US dollar while you are buying or
selling). At the same time, GBPUSD = 1.6262 means that 1 British pound is valued
at 1.6262 US dollars. Generally, if the rate XXXYYY = Z, it means that one unit
of XXX is worth Z units of YYY.
When the rate has changed, for example USDJPY = 121.44 to USDJPY = 121.45 or
GBPUSD = 1.6262 to 1.6263, they say that the rate has moved 1 point. As it
follows from the information above, yen in this example has DEPRECIATED by 1
point, but the pound has APPRECIATED, also by 1 point.
While watching the charts, you should keep in mind that only euro (EURUSD),
British pound (GBPUSD) and Australian dollar (AUDUSD) charts reflect real
movements of the rates of these currencies (that is, chart going up, means
increasing price), as growth (that is, charts moving up) mean decreasing rates
(prices) for the other currencies.
Sometimes quotes are given as a pair, for example 121.44/49. It is a BID/ASK
pair: the first number is BID, then the two last figures of ASK. Knowing that
ASK is always higher than BID and that the spread is under 100 points, the full
ASK real prices can always be defined. In this example ASK = 121.49.
