Forex Fundamentals Analysis


It measures changes in the prices of consumer goods in more than 200 different categories. If you’re familiar with earnings reports and SEC filings in the stock market, economic indicators are the closest comparison in forex. They are released at scheduled times, and surprising findings in the economic reports can lead to significant changes in a currency’s relative value. These factors can be understood through world news, economic reports, the actions of central banks, and more. Let’s dive in and get to know each of these individual factors in the forex market so that you can recognize and follow the indicators you need.

term tells you the total market value of all the goods and services a nation produced that year. You may recognize some of these economic reports, such as the unemployment numbers, which are well-publicized. However, each indicator serves a particular purpose and can be useful. It is advisable to start working on simple patterns, such as triangular figures, rectangles or reversal patterns. These types of layouts are easier to manage and the novice trader will learn to manage positions without large ranges that increase risks.

AUD/CHF Global Macro Analysis

While it can get a bit complex, the bottom line is the fact that need to have a full understanding of the market before they can trade successfully. Key factors like the changes in interest rates, inflation, retail sales, manufacturing and industrial production could bring in the wanted volatility or move the trade closer to the trader’s profit target. Since the possibility of a sharp move at this time is extremely high, it provides a great opportunity to put on a breakout trade during this time. A breakout trade strategy is an essential tool for technical trend traders.

  • Where technical analysts study past price data, fundamental analysis is more focused on how current or future events and economic data will influence prices.
  • The trader can use the news to assess a probable result on the charts.
  • Forex analysis can be broadly categorised into fundamental and technical analysis.
  • For example, a stock market recovery could be explained by investors who are anticipating an economic recovery.
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Forex.Academy is a free news and research website, offering educational information to those who are interested in Forex trading. Forex Academy is among the trading communities’ largest online sources for news, reviews, and analysis on currencies, cryptocurrencies, commodities, metals, and indices. BlackBull Markets is a reliable and well-respected trading platform that provides its customers with high-quality access to a wide range of asset groups. The broker is headquartered in New Zealand which explains why it has flown under the radar for a few years but it is a great broker that is now building a global following. The BlackBull Markets site is intuitive and easy to use, making it an ideal choice for beginners.

Never miss an important event with our live Forex Economic Calendar

This is referred to as a tend and traders make use of key levels, levels of support and resistance, and indicators to identify trends as soon as possible and with accuracy. Fundamental analysis involves assessing the economic well-being of a country, and by extension, the currency. Rather, fundamental forex traders will use data points to determine the strength of a particular currency. By nature, technical analysis focuses on the details of price action. Subsequently, many technical forex traders get lost in the minutiae of currency pricing and ignore the bigger picture. That’s why it’s important not to completely forget about fundamental analysis; it gives us insights into why price is moving, not that it already has. are preferred by technical traders because they are easy to use and provide clear signals. An important fact to note about fundamental analysis is that it can save you money in more cases than it can actually make you money. If you are technical trader, you would be much safer avoiding trading on the days or hours of major economic releases, as any technical strategy may become obsolete at such times. Many traders use Forex trading fundamental analysis software in the form of widgets for their Windows desktop, or as a browser extension. Nowadays, it is also possible to set up advanced informers that can send notifications to your email or phone when a certain event is released. This can be particularly useful for traders that prefer to trade on major news, yet find it difficult to constantly keep track of fundamental news releases.

Fundamental analysis and fair value

An NZD/USD move through the 100-day EMA ($0.62588) would give support a breakout from the 200-day EMA ($0.62967) and R1 ($0.6300) to bring R2 ($0.6343) into play. However, a fall through the 50-day EMA ($0.62211) would give the bears a run at S1 ($0.6190). A fall through the pivot would bring the First Major Support Level at $0.6708 into play. However, barring a market flight to safety, the AUD/USD pair should avoid sub-$0.67 and the Second Major Support Level at $0.6657.

What is Fundamental Analysis (FA)? Definition & Examples – Finbold – Finance in Bold

What is Fundamental Analysis (FA)? Definition & Examples.

Posted: Mon, 15 Aug 2022 07:00:00 GMT [source]

Then there is less money for banks, businesses and private individuals. Central banks will decrease interest rates to align with these levels of inflation. The lowered interest rates stimulate borrowing by individual and private banks. That said, whilst low-interest rates appear to be a good tactic to grow an economy, it is a poor strategy.

Industrial Production

With a limit of only 10 company searches a month and no stock screener access, its too limited to allow you to really use it as your primary, everyday research tool without signing up for a paid plan. As of the time of writing, Old School Value only covers US stocks. Finbox operates on a freemium model, where you can get free access to some limited data and you pay a monthly fee for additional features. You can sign up start your trial hereto start analyzing stocks with WallStreetZen.

These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy. There is a much higher chance of a successful trade if one can find turning points on the longer timeframes, then switch down to a shorter time period to fine-tune an entry.

forex fundamental analysis

We introduce people to the world of trading currencies, both fiat and crypto, through our non-drowsy educational content and tools. We’re also a community of traders that support each other on our daily trading journey. Later on in the course, you will learn which economic data points tend to drive currency prices, and why they do so. The better shape a country’s economy is, the more foreign businesses and investors will invest in that country. This results in the need to purchase that country’s currency to obtain those assets.

How to stop repeating the same trading mistakes

We have fundamental analysis, but how about macroeconomics , what does this mean? Economic news refers to each economy, in particular, the one in the United States, the eurozone economies, the Japanese economies and so on. Whether its gauging market sentiment, analysing your trading performance or using TradingView charts, every tool is designed to make you a better trader. For example, let’s imagine the GBP has been gaining strength. The British economy has been improving and the price reflects buying confidence. As the British economy continues to improve, the UK may need to raise interest rates.


Now, you can make decisions about how these tools might relate to your specific forex trading goals and strategies. This gives a general sense of how fundamental analysis works in the forex market, and you can see how learning to read economic and political news is a crucial part of learning forex. Most forex strategies will recommend that you keep an eye on political and economic news in your targeted nations, but fundamental analysis helps you understand currency value on a deeper level. Now, let’s dive into the factors that make up fundamental analysis in forex. The collection of factors that impact currency prices create forex fundamental analysis. By understanding each of the major ways a currency’s price can be influenced, you’ll be able to make better decisions that are more likely to pay off in big bucks.


This indicator allows economic analysis to compare the standard of living and productivity between countries. If consumers receive more goods abroad for the same amount of money, this increases demand for the currency in question. This causes an increase in the exchange rate, which has an unfavorable effect on the domestic currency. For example, a comparison of the data on imports and exports is possible based on the foreign trade balance. In return, high exports weigh on the prices of the exporting country and cause prices to depreciate. Fundamental analysis includes an assessment of the following factors that influence exchange rates.