FOREX THEORY
Fundamental Data and Its Many Forms
In particular, fundamental analysis
provides insight into how price action “should” or may react to a certain
economic event.
Fundamental data takes shape in
many different forms.
It can appear as a report released
by the Fed on U.S. existing home sales. It can also exist in the possibility
that the European Central Bank will change its monetary policy.
The release of this data to the
public often changes the economic landscape (or better yet, the economic
mindset), creating a reaction from investors and speculators.
There are even instances when no
specific report has been released, but the anticipation of such a report
happening is another example of fundamentals.
Speculations of interest rate hikes
can be “priced in” hours or even days before the actual interest rate
statement.
In fact, currency pairs have been
known to sometimes move 100 pips just moments before major economic news,
making for a profitable time to trade for the brave.
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