When it comes to FX trading, there are two types of market analysis which most traders default to: fundamental analysis and technical analysis. Let’s first take a look at the former. Fundamental analysis refers to the studying of the economic fundamentals of a currency, economy or country, and it can be a very powerful method for traders to predict the future health of a country’s economy, which in turn may allow you to predict the future health of that respective country’s currency.
One of the more prominent tenets of Fundamental Analysis is the study of economic data releases, which, simply put, is a form of trading which relies on market sentiment created by global news. There are literally hundreds upon hundreds of economic data releases on any given day. Every country in the world will be constantly releasing data such as Gross Domestic Product, trade balance, retail sales, unemployment rates, so on and so forth. Our Economic Calendar allows you study news releases of countries and observe their expected market impact, and many traders will find it extremely helpful to keep a close eye on news headlines from the countries relevant to their investments.
Here are some factors which Fundamental Analysis believes are highly useful when it comes to determining the health of global economies: