![]() ![]() Whenever a forex trader receives information about the state of a country, he conducts a fundamental analysis to gauge the impact of this on various currency pairs.įorex traders and investors always look into reports (fundamental analysis reports) based on critical economic data before trading (particular currency pair) on forex market. When to use fundamental analysis for the forex market? ![]() A neutral instance on currency pair indicates a flat (not much +ve or – ve side movement) movement in the near future. A negative outlook indicates a declining price movement of currency pair in coming future. If the fundamental analysis hints at a positive outlook for a particular currency pair, it indicates that the price of that pair would experience an upward trajectory movement in the near future. Instead, it helps in determining the trend of the forex spot market over a certain period. This analysis is not used to get the specific numbers for the exchange rates of various currencies. The factors may also include various geopolitical aspects that may impact the price movement of a currency pair. Forecasting of prices is based on a number of key economic factors and indicators that determine the strength of a country’s economy. It is the analysis of economic and political information with the hope of predicting future currency price movements.įundamental analysis helps in forecasting future prices of various foreign currencies. ![]() Fundamental Analysisįundamental analysis is analyzing the currency price forming, basic economical and other factors influencing the exchange rate of foreign currency. Sentiment Analysis: Apart from mini and micro analysis of data, this is the analysis of the mindsets and sentiments of traders and investors.įundamental Analysis and Technical Analysis (FA and TA) go hand-in-hand in guiding the forex trader through the way the market (prices) may go under the ever changing market conditions. Technical Analysis: This is the study of price and volume movement. ![]() There are three types of analysis used for the market movements forecasting −įundamental Analysis: This is the analysis of social, economic and political factors that affect currency supply and demand. In this chapter, we will learn about the different types of market analysis. ![]()
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