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Source: Best Forex Trading System

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Source: how to start forex trading

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Source - www.chinettiforex.com

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Forex Fundamental Analysis

In Forex, fundamental analysis it’s a method used to predict the direction of economic instruments by studying various financial indicators.

In the Forex market and referring to the currency pairs, these include unemployment rates, interest rates, GDP, inflation rates, trade balance, etc.

An important part of the value of each currency is based on the financial strength of the country to which it corresponds, which is measured through various financial indicators that hint at macro and micro aspects, which are totally influenced by economic factors clearly , environmental, political, and so on.

Some of these factors are the rate of employment, trade balance, GDP, the PPI index (producer price), foreign debt, among others. If we compare the financial strength of 2 countries, it is possible to determine which of them is the strongest currency, so its price will be upwards. It is clear that in any case this does not offer the necessary support to be able to take a particular decision to a long timeout, never a short period of time because of high speculation present in the world of Forex. More and more traders operating at the time of the publication of news and financial data, which is known as “trade the news”.

This allows the data published after, have very prominent movements to what concerns the price of a particular currency pair, which even be able to achieve over 100 points in the final minutes, which turns out to be very attractive. Most online brokers offer their customers financial services calendar, featuring the date and time have been published or economic news.

We can find lots of financial indicators, but each has equal importance, as well as impact. Among them there are 5 that stand out with reference to the U.S., although they may be transferred to any other country in the world. These indicators are: Non – Farm Payrolls, Interest Rate Decisions, Trade Balance, CPI – Inflation and Retail Sales. Before creating an account at Forex and start investing, is the foundation to study the fundamental purpose of the analysis and understand very well the currency market movements.