Forex Fundamental Analysis
The basics of Forex fundamental analysis
Forex Fundamental Analysis. Basics
What is fundamental analysis?Fundamental analysis in Forex is a type of market analysis which involves studying of the economic situation of countries to trade currencies more effectively.
It gives information on how the big political and economical events influence currency market. Figures and statements given in speeches by important politicians and economists are known among the traders as economical announcements that have great impact on currency market moves. In particular, announcements related to United States economy and politics are the primary to keep an eye on.
What is economic calendar?Economic calendar is created by economists where they predict different economics figures and values according to previous months. It contains next data:
Date — Time — Currency — Data Released — Actual — Forecast — Previous
For example: If the forecast is better than the previous figure, then US dollar usually is going to strengthen against other currencies.
If to look at oil prices, a rising price will result in weakening of currencies for countries which depend on huge oil import, e.g. America, Japan.
Whose speeches to keep an eye on?Chairman of the Federal Reserve Bank of USA, Secretary of the Treasury, President of the Federal Reserve Bank of San Francisco and so on. Speeches of those prominent people are watched closely by traders.
What are the most powerful figures that move Forex market?Interest rate
Traditionally, if a country raises its interest rates, its currency will strengthen because investors will shift their assets to that country to gain higher returns.
Trade balance, budget and treasury budget
Gross Domestic Product (GDP)
When it comes to news trading Forex brokers, however, may not be supportive of traders intensions to trade during news announcements. There has been practices reported when Forex brokers simply freeze platforms during news, so that no trades can be opened or closed.