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Forex Trading Fundamental Analysis

What is the main difference between Fundamental analysis and Technical Analysis

The fundamental analyst studies the causes of market movements, while the technical analyst studies the effect. Many people made profitable trades after or before economic announcements.
 

Fundamental Analysis Indicators There are many indicators will help us in fundamental analysis like:

 CCI-Consumer Confidence Index last Tuesday of the month covers current month's data, information. CPI-Consumer Price Index around day 20 covers previous month data. Element Report 1st Friday of each month covers previous month data. Employment Situation Report  1st Friday of each month covers previous month data.

and many other indicators will help understanding the movement in the forex market.

Forex Trading Fundamental Analysis

Online Forex Trading Fundamental analysis is used to forecast the behavior of the forex market like the technical analysis but it based on different factors  like economic, political, environmental and other relevant factors, when fundamental analysis used with technical analysis to determine their trading strategy the chances of predicting the currencies movements are much higher .

The Economic Factors affect the Forex Market

Employment Data Non-farm payrolls is the name given to the data that pertains to the number of people who are employed within the US economy. Strong decreases in employment indicate a contracting economy, while strong increases are perceived indicators of a prosperous economy.

Interest Rates is very important in forex market. Since the central banks mandate monetary policy and supply, they are the prime focus of investors.

Inflation This is the measure of increases or decreases in pricing levels over a period of time. Due to the immense number of goods and services available in a country, usually a grouping of these goods and services are used to measure changes in the pricing. Increases in pricing indicate an increase in the inflation rate which in turn can devalue that country's currency.

Gross Domestic Product This is the measurement for goods and services that were finished over a period of time. The GDP is broken down into 4 categories:

1. business spending
2. government spending
3. private consumption
4. total net exports

Durable Goods Goods that have a lifespan of three or more years are considered durable goods and they are measured in quantities that are ordered, shipped, or unfilled over a period of time. These are also an indicator of economic spending or the lack of it.

Trade and Capital Flows Currency values can be significantly impacted by monetary flows that result from certain interactions between countries. When imports exceed exports, there is a tendency for the currency value to decline. Increased investments in a country can lead to the opposite result.

Macroeconomic and Geopolitical Events Elections, financial crises, monetary policy changes, and wars influence big changes in the Forex market.

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