FOREX THEORY
Fundamental Data and Its
Many Forms (Part 2)
That’s why many forex
traders are often on their toes prior to certain economic releases and you
should be too!
Generally, economic
indicators make up a large portion of data used in fundamental analysis. Like a
fire alarm sounding when it detects smoke or feels heat, economic indicators
provide some insight into how well a country’s economy is doing.
While it’s important to
know the numerical value of an indicator, equally as important is the market’s
anticipation and prediction of that value.
Understanding the resulting
impact of the actual figure in relation to the forecasted figure is the most
important part. These factors all need consideration when deciding to trade.
Phew!
Don’t worry. It’s simpler
than it sounds and you won’t need to know rocket science to figure it all out.
I suggest you visit Pip
Diddy’s daily economic roundup every day so that you can stay in the loop with
the upcoming economic releases.
Fundamental analysis is a
valuable tool in estimating the future conditions of an economy, but not so
much for predicting currency price direction.
This type of analysis has a
lot of gray areas because fundamental information in the form of reports
releases or monetary policy change announcements is vaguer than actual
technical indicators.
Analysis of economic
releases and reports of fundamental data usually go something like this:
“An interest rate increase
of that percentage MAY cause the euro to go up.”
“The U.S. dollar SHOULD go
down with an indicator value in that range.”
“Consumer confidence dipped
2% since the last report.”
 That’s why many forex traders are often on their...){kind=link}
0 comments