Technical forecasting refers to development of forecasts using historical prices or trends. It involves the use of historical exchange rate data to predict future values. There may be a trend of successive daily exchange rate adjustments in the same direction, which could lead to a continuation of that trend. Alternatively, there may be a trend of the average daily change in the exchange rate per week over several recent weeks. A trend of higher mean daily exchange rate adjustments on a weekly basis may indicate that the exchange rate will continue to appreciate in the future.
Definition