How Does The Foreign Exchange Market Compare To The Equities Market, And Where Might Professionals Be Heading In 2022?

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The equities market had yet another gangbuster year in 2021.

Despite a pandemic, rising inflation, and political tensions, the SPDR S&P 500 trust SPY would reward 2019 investors with a stellar 72% return in the three years leading up to 2021. Other exchange-traded funds (ETFs) encompassing different sectors and securities like the iShares Russell 2000 ETF IWM and the Invesco QQQ Trust QQQ share three successive years of positive returns, albeit of differing magnitudes.

For those up to date on the stock market’s activity, these picks are likely unsurprising, as many contenders in these industries saw immense growth in 2021. Metaverse-intensive Nvidia Corp. NVDA, for example, grew 125% in 2021, and newcomer Roblox Corp. RBLX grew by 60% during the same year as its initial public offering. In a similar vein, electric-vehicle companies like Lucid Group Inc. LCID and XPeng Inc. XPEV received significant interest in 2021, and the former saw a yearly gain of 280%.

With the Consumer Price Index rising by roughly 7% in 2021 – the highest reading since 1982 – some investors are increasingly wary that this movement is unsustainable, particularly in growth stocks. Analyst firms and professional funds seem to have reached a consensus that 2022 could be a rockier year for the equities market, prompting a portion of investors to look elsewhere for potential opportunities. 

FOREX.com: A Potential Avenue Into Foreign Exchange Trading? 

For many investors, the sturdy foreign exchange market might provide a potential outlet for opportunities in 2022. If 2021 was any indication, there are plenty of opportunities for investors in the foreign exchange (forex) market. Take the pound-to-dollar (GBP/USD) pair.

Between January 4 and February 24, the pair had risen from 1.357 to 1.414, exhibiting a 5% bullish run with little pauses in between. After a slight decline and a double top around June, the pair began a 7.48% descent that took it from a high of 1.424 to a low of 1.316 on December 8th. The currency climbed to a high of 1.374 on Jan.13 2022, another 4.44% move in just a month. The volatile movements presented both bulls and bears – and traders who alternate in between – a variety of tasty opportunities in 2021, and it looks like 2022 is set for similarly rocky price action.

The euro-to-dollar (EUR/USD) presented another terrain of opportunities for traders with a keen eye for trends, reversals and breakouts. Unlike the GBP/USD pair, the EUR/USD began in 2020 in weakness, dropping from a high of 1.235 on Jan. 6 to a low of 1.17 on March 31. The 5.17% slump then turned around swifty, sending the pair back up to 1.226 by May 26. The pair then experienced a 7.83% fall that took the pair to a low of 1.130 on December 31st.

As the equities market cools down, FOREX.com is one example of a platform that may provide investors with a reliable avenue to trade volatility in other markets. In a monthly report published by the Commodities Futures Trading Commission, FOREX.com was listed as the top broker in the U.S. for forex trading.

This reliability, coupled with top-quality trading platforms and solid education resources, makes FOREX.com a credible entry into the forex market for investors of all skill and experience levels.

This post contains sponsored advertising content. This content is for informational purposes only and is not intended to be investing advice.