Here you can find a comprehensive guide on Forex fundamental analysis. It represents a whole methodology, which objective is to forecast price action and market trends in the future by examining economic indicators, government and central bank policies, societal factors and other force majeure events, such as war, natural disasters etc.
1.What is Forex?
Forex stands for foreign exchange and basically consists in trading one currency for another.
2.Advantages of the Forex Market
The forex market is actually the biggest financial market in the world. There are more than 5 trillion dollars traded on daily basis.
3.Introduction to Fundamental Analysis
Fundamental analysis stands for the entire study of the basic underlying elements, which have an impact upon economy.
4.Forex Fundamental Analysis Explained
One of the most important things every broker should be aware of, is there are 2 types of analysis when it comes to forex trading – technical and fundamental.
5.Monetary Policy and How it Impacts the Value of Currencies
When it comes to fundamental analysis of a currency of a particular nation, one of the most influential factors to mark trading currency pairs, is the monetary policy course, adopted by central banks.
6.Inflation and Interest Rates
Inflation and interest rates are in close relation to each other, and frequently referenced together in economics.
7.Reserve Requirements of Banks
Typically, central banks refrain from interfering in the economy, unless a major imbalance occurs and the value of the local currency needs to be protected and vice versa.
8.Open Market Operations
Open market operations affect currency trading prices, employment and other fundamental analysis factors.
In order to measure the amount of money available in the economy, central banks use the so-called monetary aggregates – broad categories gauging the total value of money supply.
10.GDP-Gross Domestic Product
The gross domestic product (GDP) is one of the primary macroeconomic indicators used to assess the condition of a country’s economy.
10.Labor Market and Its Significance
By definition, the labor market is the nominal market in which able-bodied people find paying work, employers look for willing workers and wage rates are determined
11.Retail Sales and Personal Consumption Expenditures
Retail sales are an extremely crucial indicator for overall economic activity of any nation.
12. Housing Market
Housing data attracted lots of attention in 2006 leading up to the global financial crisis in 2008 following the collapse of the mortgage market in the US, the UK, Europe and several other prominent world economies.
13.Consumer Price and Producer Index
The Consumer price index (CPI) is a major gauge of inflation for one economy. This index is based on a basket of goods and services bought and used by consumers on a daily basis.
14.Current Account Balance of Trade
The Balance of Trade is the largest component of a country’s current account, which respectively is one one of the two primary components of the Balance of Payments, the other being the capital account.
15.Purchasing Managers’ Index (PMI)
The Purchasing Managers’ Index (PMI) is a compound and timely indicator, providing clues regarding sentiment in sectors of the economy such as manufacturing, services and construction.
The consumer confidence provides clues as to how the public would estimate their ability to obtain employment and how their income would be spent.
17.Factory Orders and Industrial Production
Factory Orders represent an economic indicator which consists of two separate indicators; durable and non-durable goods orders.
18.Monetary Policy Announcements and Verbal Interventions
Central banks are very well-organized in terms of their communication with market participants, as they have a predetermined schedule of policy meetings, speeches or testimonies by officials etc.
Here we discuss a number of events that often occur globally and see in what way they may affect the Forex market.
20.Major Players in Forex and Styles of Trading
Here we discuss the major participants on the Forex market: central banks, hedge funds, high net worth individuals, day traders, businesses.