I only trade based on technicals and analyze my charts for trading signals, but I think it is important to keep up with interest rates decisions by central banks as currency pairs will move. The moves may be temporary, but it can offer better entry levels to trades which is why I always keep up with developments out of central banks (not just interest rates, but other monetary announcements as well).
If it is only thing you do as a technicals trader, you must do that. Interest rates are probably one of the biggest market movers. The FX market is loaded with bots so volatility is greatly reduced as a result, so big swings are far and far between. The RBA moved rates and the AUD fell more than 1200pips in a week give or take at $10 a pip, do the Math, even $1 a pip it would have been a good week. On the flip side not looking at rates could mean you are long on the USD and Bam! The Fed drops its rates…We all know how that story ends…In all fairness most news is discounted anyway so if rate adjustment was expected the market makers would have already started to adjust, I would say keep an eye on the Commitment of traders report should really give you a heads up. Fundamentals are important as long as you are not eating that s@@@ from the press, they are always late anyway. Follow the data, if your economics is sound you could probably anticipate potential interest rate changes based on that countries monetary policy strategy.
Example now, the FED taper in the next months will reduce the money supply in the market so naturally going long on the Dollar is sensible at this point, however this could lead to deflation if market conditions are not ready for it, so if you are a fundamental trader then I would keep an eye on confidence data in the next few months. As you can see the reason people stay away from fundamentals and would prefer to accept stop losses as a preferred way of dealing with news swings is because fundamental analysis is one of the most daunting aspects of economics. You can’t go wrong of you follow the money.
stick with the charts, keep an eye on the data if you are longer time frame trader like me.