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Fundamental Forex Analysis - Forex Economic Indicators PDF - Best Forex Fundamental Analysis Site

Forex Fundamental Analysis Course - Forex Fundamental Analysis Tools - Forex: A Guide to Fundamental Analysis PDF

 

Why A Forex Trader Should Know About Fundamental Economic Reports - Forex Economic Indicators

The two primary approaches of analyzing the forex markets are fundamental analysis and technical analysis. Fundamental analysis focus on financial and economic theories, as well as political developments to determine forces of supply and demand.

 

Fundamental analysis in forex studies the causes of market movements while forex technical analysis studies the effects of forex market movements.

 

What is Forex Fundamental Analysis? Fundamental analysis deals with the underlying reasons of why the forex price of a forex currency pair will change. Forex Fundamental analysts examine the country that is represented by a specific currency. If the economy of that country looks good, then the value of its currency is going to increase. Fundamental analysts buy currencies of economies that are doing well by analyzing Forex Economic Indicators of those economies.

 

What is Forex Technical Analysis? With technical analysis forex price moves in specific patterns. Forex Technical analysts use these forex price patterns to predict movement of the currencies and decide which currency pairs to buy or sell.

 

Fundamental analysis is a fundamental strategy of forex trading widely used by online forex traders. This fundamental analysis forex strategy uses estimations which are used to predict the conditions of the economy based on Forex Economic Indicators.

 

The interest rates and the overall economy strength are the two key factors that are involved in fundamental analysis. The strength of the overall economy is measured using a number of macroeconomic indicators like GDP, Retail Sales, Consumer Spending, Inflation, Trade balance and Political Stability - Forex Economic Indicators used in forex trading analysis. These macroeconomic factors are referred to as forex economic indicators.

 

Interest rate is the most important factor that is involved in fundamental analysis. The interest rate of a currency directly impacts the amount of inflation that is present in a country. If interest rates are increased, the amount of inflation in the country decreases. If interest rates are lowered, inflation is increases.

 

Example: USA Federal Open Market Committee FOMC rate decision announcement has a huge impact on the Forex market.

 

Fundamental analysis by Comparing Countries

Every Forex trade transaction involves buying one currency and selling another. Fundamental analysis in forex trading is a type of forex 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 the foreign exchange market

 

The Forex Carry Trade: Fundamental analysis forex trading by comparing interest rates of currencies.

The forex carry trade is a forex trading strategy in which a forex trader sells a currency that is offering lower interest rates and purchases another that offers a higher interest rate. In other words, you borrow at a lower rate, and then lend at a higher rate. The forex trader using the forex carry trading strategy captures the difference between the two interest rates. When forex trading leverage is used in the forex carry trade, even a small difference between two interests rates can make the forex carry trade highly profitable. Along with capturing the interest rates difference, investors also will often see the value of the higher interest currency rise as money flows into the higher-yielding currency, which bids up its value.

 

 

Major Economic Reports Forex Traders Should Know: a.k.a Market Movers - Forex Economic Indicators PDF Tutorial

Some of these forex economic indicators news reports can move the market within a range of 100 - 200 pips within minutes of their announcement, and it is best to keep a time table of when these forex economic news releases are scheduled to be announced.

 

US economic indicators

  • US Non Farm Payroll - Employment report of jobs created in the United States
  • Interest rates (FOMC) - Federal Open Market Committee FOMC rate decisions
  • US Gross domestic product (GDP) - a measurement of growth in economy
  • US Trade Balance - proportion between exports and imports in US economy
  • Treasury Inflow Capital (TIC) Data - a measure of how much foreign buying of a country securities takes place
  • US Retail Sales - measure of consumer expenditure
  • Consumer price index (CPI) - measure of inflation

 

NB: because the US dollar is involved in over 80% of all forex trades, US economic data tends to be the most important in the Forex market.

 

 

Japan economic indicators

  • Bank of Japan Monetary Policy Meeting - measures strength of the JPY
  • Trade Balance - Japanese imports versus exports
  • Gross domestic product (GDP) - growth in an economy
  • Consumer price index (CPI) - measure of inflation
  • Industrial production index - a measure of activity in the Japanese manufacturing sector
  • Retail sales - a measure of strength of consumer expenditure
  • Tankan report - assessment of Japanese business conditions
  • Unemployment rate

 

 

Great Britain economic indicators

  • GBP Trade Balance - a proportion between exports and imports
  • Gross domestic product (GDP) - growth in an economy
  • Consumer price index (CPI) - measure of inflation
  • UK Housing Prices - UK Housing Prices gauge the level of inflation in the UK .
  • Bank of England Meeting -outline of monetary policy and changes to GBP rates.
  • UK Unemployment rate
  • UK Retail Sales

 


Euro Zone economic indicators

  • Euro Zone Countries Trade Balance - a proportion between exports and imports
  • Euro Zone Gross domestic product (GDP) - growth in an economy
  • Euro Zone Consumer price index (CPI) - measure of inflation
  • ECB meeting -outline of monetary policy and changes to GBP rates.
  • Euro Zone Unemployment rate
  • Euro Zone Retail Sales

 

All these forex economic news reports can be found on forex economic calendar, available on various forex trading sites online.

 

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