Dislikedit's possible that I'm not getting it right, I would appreciate a further explanation.
As long as I understand buying stocks is same as buying currency cuz you have to use the currency in order to own the stock. for example: a hard working eu region citizen decides to put his savings in US stocks so he sells EUR - buying USD in order to buy the stock. Am I wrong?
even tho' you might be right that some currency traders know the news before everyone else that way using it to manipulate earnings before the market actually reacts to the news. (short...Ignored
You got that backwards. The pair is driven mainly by dollar news and dollar risk. (the whole world is driven by the dollar with the secondary of any pair being the minor). The good news increases the risk appetite so investors buy US equities, that increases the supply in dollars and therefore the euro climbs as the counterpair. The pair does not necessarily changes price due to both sides of the pair, it only needs one. Trading fx means you are trading in pairs and have 4 different risks that determine the underlying price, it is more complicated then equities and noobies can't get their head around it at first.
Stop looking as news as being good vs. bad; look at news as an increase or reduction of risk.
I keep saying the same thing, trade the risk, forget the rest and you will be on the right side of the market. Just weigh the risk appetite or lack thereof of one half of the pair vs the other half.
Both euro and dollar are in a race between 2 ugly sisters for an invite to the ball, judge the resultant net risk and you get a price direction.
In a very simplistic way, if the news is good and gives rise to an increase in risk, then the euro will go up (barring any news from the EU), if the news is good and does not give rise to an increase in risk (aversion) then the euro will remain and the dollar will go up. So good news can bring the pair up or down, the risk appetite will tell you the net effect of the news, today's number meant an increase in risk so dollar down, no further news from the EU so euro up. It didn't last though and the news only gave us a triple move (60 pips), this is not like NFP.
Don't trade the news, trade the risk.