HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%
XM information and reviews
XM
82%

Fundamental Forex Factors


When it comes to forecasting forex rates, the science of fundamental analysis involves taking into account a variety of relevant economic and political factors for one currency relative to the other currency in each currency pair considered.

A fundamental analyst will review as many of these items as possible on a regular basis for each currency and then compare the two to obtain a forecast. Generally, such forecasts are not specific objective numbers for the exchange rate, but instead an overall directional outlook on the currency pair.

For example, their outlook might be positive, negative or neutral after the analysis. This would mean that the analyst expects the exchange rate for the currency pair to rise, fall or stay roughly constant respectively.

Furthermore, when some new fundamental information enters the forex market in a sudden way, it can prompt significant market moves and volatility as traders react to the new information. At such times, one of the most basic assumptions of technical analysis - the idea that "price discounts all" - breaks down until the new information has been duly assimilated.

If you have a trading system based on purely technical indicators this is really important, as a number of key fundamental factors can and often do influence market moves, which may produce unexpected results when trading using systems based on technical analysis.

As a result, it really pays to know what the likely effects of such key fundamental information could be so that a quick assessment of probably future direction can be made.

Primary Fundamental Information Types


The types of fundamental data items which will most impact a country's currency along with a brief description of its likely effect include the following:

Key Economic Factors


Many forex traders perform a daily review of economic calendars for the currency pairs they maintain positions in. They do so since the release of such key information can often result in considerable short term volatility in the currency market, as well as prompt shifts in market sentiment.

A list of key economic factors that are routinely covered in the current news and which can move the market when they are released includes the following:

Other factors

Fundamental Information and Technical Trading


Combining fundamental news analysis along with technical analysis offers the trader the best of both worlds and will minimize surprises while trading.

Some traders purposefully avoid trading on days with economic releases because the market may become temporarily volatile only to settle back towards the original trend.

Also, technical forex traders might avoid known risk events like major economic data releases since one of the key assumptions of technical analysis: "Price Discounts All" tends to break down during the period immediately after the announcement as the new information is assimilated into the price.

#source


RELATED

What is a Crypto Saving Account? How to Earn Interest on Crypto?

One of the best ways to earn when it comes to financial markets is through this steady return of interest. While most bond and stock traders understand the ability to benefit from interest accounts...

Trading GBP vs Euro Characteristics

After almost two decades of forex history, the GBP vs Euro pair is today one of the important major currency pairs in online trading. Both the Euro...

Unlocking The Power Of Correlation In Forex Trading

Correlation plays a crucial role in forex trading, providing valuable insights into the relationship between currency pairs. By understanding and analyzing correlations...

Bitcoin Investment: A Guide To Trade Bitcoin

As you may already know, cryptocurrency, especially bitcoin, is the most traded financial instruments in recent history. Bitcoin is a popular digital currency among...

Complete Guide to precious metals trading

Both Gold and Silver are considered valuable metals and have been chosen by various clients for years now. Nowadays, precious metals trading...

What is staking and how does it work?

When it comes to earning with cryptocurrencies, investors usually consider buying prospective assets or mining them. However, there is an alternative...

Investing in Bitcoin in 2020: Is It a Good Idea?

The one of a kind financial asset has been compared to gold and said to have the potential to unseat the dollar as the global reserve currency one day...

The Benefits Of Cryptocurrency Explained: Should I Trade Cryptocurrencies?

Gold has been in use for ages, and the stock market dates back hundreds of years. Cryptocurrencies have been around for more than a decade now...

How to Make the Most of the Crypto Drop with Shorting?

The crypto market undergoes a clear negative trend that is expected to last for a while. Bitcoin has plummeted by 33% this week and reached the 18-month low...

Mastering Financial Markets: A Comprehensive Guide to Market Dynamics

Navigating the financial markets successfully is a complex task that requires a deep understanding of market dynamics. This guide aims to demystify key concepts such as market trends...

Trading EURGBP on Brexit Uncertainty

Ask most established currency pair traders to pick between fundamental and technical analysis, and you'll often get a lengthy monologue

High Frequency Trading (HFT) in the World of Retail Trading

High Frequency Trading, better known by its acronym HFT, is a buzzword in the forex trading industry. As the world of trading evolves with the rise of technology, the line between large institutional traders...

Guide to Fundamental Analysis: Unlocking a Trader's Full Potential

In the world of trading, understanding the intricacies of fundamental analysis is paramount. From novice traders just dipping their toes into the world of finance to seasoned professionals with years of experience...

Discovering Cryptocurrency Margin Trading

Margin Trading has become a popular term across many different trading markets, and in recent times it has become very highly regarded in the emerging cryptocurrency...

Secrets of trading in the Asian session

Practically every trader knows that the particular dynamics of the pricing of financial instruments depends not only on the selected asset, but also...

Secrets of trading by Fibonacci levels

It is difficult to find a trader, even among newbies, who have never heard of Bill Williams - the developer of effective indicators integrated into almost every...

How did investors survive the crises of past decades?

The world indexes have never fallen so quickly and strongly before. The financial crisis that has begun is unique for its trigger - it was caused by a virus COVID-19...

How to earn cryptocurrency without investment

Everyone enters the cryptocurrency space to make money, but not all of them succeed. Many people either give up or lose money because they do not correctly understand how to make money with cryptocurrency.

All you need to know about how to trade cryptocurrency

Cryptocurrencies have received devotion from millions of investors across the globe due to cryptography and transparency of transactions. They have started...

Is the US market too expensive during COVID-19?

Global financial media have reported the "extreme cost" of the US stock market in recent days. In theory, this should be followed by an imminent collapse...

FP Markets information and reviews
FP Markets
81%
RoboForex information and reviews
RoboForex
77%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Exness information and reviews
Exness
76%
Just2Trade information and reviews
Just2Trade
76%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.