Using moving averages to assess trend direction is the oldest form of technical analysis and remains one of the most commonly used indicators. The primary benefit provided by a moving average is to reduce market "noise" (rate fluctuations) that make it difficult to accurately interpret real-time exchange rate data. Moving averages "smooth out" these fluctuations, making it easier for you to identify and authenticate potential market rate trends from the normal up-and-down rate fluctuations common to all currency pairs.
All traders seek to find a trend when studying pricing data. Traders also attempt to identify a rate trend reversal point in order to time market buys and sells at the most profitable level. Moving averages can help in both regards.
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