Forex Fundamental analysis
One of the key factors, which has influence on any trader’s success is his ability to correctly predict the market movements. The two main methods are technical and fundamental analysis of Forex market.
An important feature of fundamental analysis is its global nature. Events, which are analyzed in fundamental analysis, have long-term influence on supply and demand on the currency market. This information is composed of the news about the world’s biggest political and financial events. It’s hard to overestimate the influenced the news has on financial markets: when the most important news is published, the market volatility increases.
It’s quite easy for an experienced trader to analyze and predict how a single event may influence the market. However, analysis of several events, which may influence the market in completely different ways, is a very complicated and time-consuming process. This may be the reason why only approximately 20% of traders use fundamental analysis as their main forecasting tool.
Fundamental approach to Forex market analysis, unlike technical one, covers not only the prices and their changes, but the reasons for these changes as well. Each approach has its followers, advantages and disadvantages.
While the external background sends investors news, the main currency pair prefers not to make any unnecessary movements.
The GBP/USD pair barely moved on Tuesday afternoon, as investors assess the impact of raw news and analyze British statistics.
The USD/JPY pair is gradually restoring positions after a series of February sales.
Two-week sales in the USD/JPY pair led the instrument into the area of the minimums of the last fifteen months.
Despite the drop in German industrial production in November and December, the German economy is still able to show an increase of 0.3% in the fourth quarter.
It looks like Eurodollar is about to complete the diagonal triangle (v) in the ascending impulse [c].
On Thursday afternoon, the main currency pair is trading in the middle, although the euro has managed to win back yesterday's losses.
The GBP/USD pair continues to strengthen on Wednesday, although the British macroeconomic data was minor.
The main currency pair remains near the highs of five months, as the market is nervous about what is happening in the United States.
Side effects of a prolonged period of loose monetary policy of the world's leading central banks are gradually making themselves felt.
The AUD/USD pair is trading lower on Tuesday after the publication of statistical data on the Australian economy.
The AUD/USD is trading up on Monday, China has gone on a long vacation.
By Friday, the USD/JPY pair has retreated, maybe even too much – the Japanese economy doesn’t need a strong currency.
The main currency pair is growing on Thursday after the publication of statistics and comments by Mr. Dudley.
On Wednesday afternoon, the main currency pair is trading very sluggishly, as investors analyze the statistical flow.