EDUCATION
Fundamental Analysis Guide
Fair price evaluation using macroeconomics. Learn the economic indicators that move currencies and the strategies traders use to act on them.
Crucial economic indicators
Fundamental analysis looks at economic, political and social factors that affect currency values. These indicators have a considerable influence on the forex market.
- Inflation rates: measured by the Consumer Price Index and Producer Price Index, which influence central bank interest rates
- Central bank policy decisions: interest rates, quantitative easing and forward guidance
- Gross Domestic Product (GDP): a primary measure of economic health and growth
- Employment data: employment and unemployment rates and non-farm payrolls
Trading strategies based on fundamental analysis
- News trading: capitalising on volatility around high-impact economic releases
- Carry trading: buying a high-yielding currency while selling a low-yielding one
- Event-driven trading: trading elections, natural disasters or trade agreements and their effect on currencies
Best practices
- Regularly monitor economic calendars
- Use multiple reliable information sources, such as news outlets, data providers and government agencies
- Combine fundamental and technical analysis