Fundamental Analysis covers the study of economic indicators, social factors and international government policies which help forex and CFD traders forecast price movements and trends.
Fundamental analysis is a method that attempts to predict the intrinsic value of an investment. It is based on the theory that the market price of an asset tends to move towards its 'real value' or 'intrinsic value'.
Fundamental analysis in Forex entails predicting the price valuation of a currency and its market trends by analyzing current economic conditions, government policy and societal factors within a business cycle framework. Forex Traders gauge a country's economic state by examining macroeconomic indicators covering:
- Interest Rates Announcement
- Gross Domestic Product (GDP)
- Consumer Price Index (Inflation) and Spending Indicators
- Employment Indicators
- Retail Trade and Consumer Confidence
- Balance of Trade Surplus or Deficit
- Government Fiscal and Monetary Policy
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