Why would technical analysis not be useful if the international parity conditions held?
What will be an ideal response?
Answer: If the parity conditions held, technical analysis would not be useful in the sense of providing profitable trading information or information about expected exchange rates that could not be obtained elsewhere. If the parity conditions held, the best predictor of the future exchange rate would be the forward rate, and exchange rate forecasts based on other indicators would not lead to systematic profits on currency speculation.
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