Fundamental Analysis: For The Best Forex Trading Decisions
Cutting down the long chase for a successful Forex trading career can be achieved only through the use of Forex fundamental analysis tools. The market is evaluated depending on the economic conditions of the countries. Economic changes and significant events that happen in a trading country can guide traders into effective trading strategies. Through this tool, traders get a big picture of how the economic and political events affect the trends of the Forex market. Breaking news as well as statements from important economic and political figures are recognized by traders as potent influence to the Forex market. These economic announcements can affect the currency market either directly or indirectly.
Expert Forex traders always put an eye on key economic events and political conditions in the United States. In the past few years, the Asian economy has also received much attention due to the slow of the US economy. It makes it doubly important for traders to be abreast with the current events.
Fundamental Analysis, For the Best Forex Trading Decisions (Courtesy of HenryLiuForex.com)
Fundamental Analysis: For The Best Forex Trading Decisions
Forex fundamental analysis also evaluates the market depending on the economic calendar, meaning analysts predict market movement on the basis of the values and figures as reflected in the previous months. Most of the time, conditions of the Forex market can be predicted using the regular fluctuations in the supply and demand. For example, increasing oil prices can weaken currencies of countries that depend on imports. The United States, Japan, and Europe can be directly affected by this key economic event. Other fluctuations in economic goods can give a boost on the currencies of oil exporting countries, such as Canada. As mentioned earlier, there are several key speeches and breaking news that Forex traders need to have their ears glued to. Speeches and announcements from the Office of the Secretary of Treasury, Federal Reserve Bank, World Bank, and so on can directly affect the Forex market. Depending on the substance of the announcement, these economic events can topple the current market trends and can push through a new trend. For new traders, they must start to acknowledge these factors as they can determine whether you gain or lose. Fundamental Analysis, For the Best Forex Trading Decisions (Courtesy of HenryLiuForex.com)
Fundamental Analysis: For The Best Forex Trading Decisions
While external economic factors are known to affect Forex market conditions, internal economic variables also play a major role in the volatility of the market. Generally, Forex fundamental analysis is bound on four important news events, Gross Domestic Product GDP, Treasury Budget and Trade Balance, Employment numbers, and Interest Rate. Considered as the most influential economic variable, Gross Domestic Product is closely followed by Forex traders because it reflects the economic activity of the country. A growth in GDP can make traders expect higher interest rates which is good for that currency.
Fundamental Analysis, For the Best Forex Trading Decisions (Courtesy of HenryLiuForex.com)
Fundamental Analysis: For The Best Forex Trading Decisions
Countries with considerable trade balance deficit can also help predict which currencies fare poorly as the currency will need to be sold continuously to regain its status. Just like in GDP, employment conditions can be considered as a powerful driving force in the economy. Experienced Forex traders evaluate the payroll situations in a country since it can dictate the economic health of the currency. Finally, interest rates are known to affect the economic standing of a currency. Investors tend to move their assets to countries with higher interest rates thus that country’s currency starts to gain momentum. For over a hundred of years, Forex fundamental analysis has become a cornerstone in important decisions of Forex traders. This is one of the skills that you need to develop to have a fruitful career in Forex Trading. Fundamental Analysis, For the Best Forex Trading Decisions (Courtesy of HenryLiuForex.com)