Fundamental forex analysis

Hi, I’m a little lost.
My name is Andressa, I am a young university student and I live in Brazil.
I got to know the foreign exchange market 5 months ago.
I started an intense process of technical analysis studies, for long weeks I only operated technical analysis, however, i didn’t identify with the method.
Recently I’ve been focusing on fundamental analysis analyzing swing positions and position trade, the result is being positive, my basic knowledge in monetary policy and market phases together with lot size, margin level, leverage, spreed and a lot of patience has been keeping me alive in the market.

Finally, I feel “loose” in the world of fundamental analysis in forex … I would like you to report your routine, which ones
do the tools / sites use daily? What steps do you take before entering a position?

if you want to check out how fundamental events influence currency prices, take a look at the daily economic news which are published on several sites, those news have (more or less) immediate impact on the currency prices.
Economic Calendar - is one of the best.
Hope i could help you!

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Most technical traders just watch out for the central bank interest rate announcements for the currencies they have positions in and they make sure they are out of those currencies before the news. Many traders also get flat ahead of US NFPR’s.


I use MetaStock Xenith. It’s a professional PC based application with news, fundamentals and technical analysis charting at quite a reasonable price. This software is also known as Routers Eikon and next to Bloomberg Terminal it is the best money can buy and at a very reasonable price.
Before entering a position I do a combination of fundamental and technical analysis. For fundamentals I check news and upcoming releases and for technicals I use the hourly chart with trend lines as support and resistance. I look for correlation with the major pairs to see if there is clear USD direction and I check the range over the last 24 hours. Lastly for USDJPY and all other Japanese Pairs I check the Kumo Cloud. Depending on my analysis I will either sit on the sideline or place orders using one of my EAs.
I have an EA for trading data releases when automatically, one to follow my trend lines, one to follow the Kumo Cloud and another for live market execution. All my trade execution I use MT4.
I’d be interested to hear what your system is like too please.

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Want know step to take? Think about this: Will the currency pair go up in the next one hour? Why? and how many pips will it move up?. If you find the answer to question like this, then you’ll know to enter the trade. You can use Fundamental or technical analysis to find such answers.

The secret of fundamental trading is that you are collecting pieces of economic variables and put them into large frame. Focus on few countries, dont spread too much as you need to stay focused. Certainly, as somebody already mentioned, majority of beginners are focusing on changes of interest rates

Hi Andressa

You remind me of myself.
Swing, position trading
Patience in the market

Look. In my mind, that’s fascinating stuff. I mean, it’s all macroeconomics.
I’ve noticed this about myself from the beginning (7 yrs in now).

But, when it comes to trading, you kind of have to separate some wheat from the chaff, so to speak. The market moves. And the best way to think about why it moves can be boiled down to being either from technical reasons or fundamental reasons. There is a third reason. It’s called sentimental.


How I’ve come to reconcile this, is by way of figuring it all out by yourself.

I know that’s probably not what you want to hear. Sorry. But think of it. Technicals run the market, it seems, anything from the daily time frame and lower. So, if you trade anything around the daily time frames, you’re gonna have to adopt some of the technical indicators to get you in and out of trades. Right?

But there shouldn’t be a reason why you couldn’t have eye out for what the fundamentals are up to. It’s kind of like you have to do your own research. Like, find out what are the most important fundamental factors, for each currency, that’ll have a direct correlation on how the currency will move. This is some of the things I’ve figured out (in the way of much reading).

  • Interest rate differentials
  • Central bank forward guidance
  • The country’s bond yields
  • The perceived sentiment of each country (current events)

Those are some of the things I keep a keen eye on. But, you have to remember what we’re all doing here in the first place.

Forex is nothing but sizing up one country’s currency against another, right? It’s the supply and demand between 2 of them. And whichever one is in more demand, usually is the one in which will appreciate over the other. So basically, you kind of have to put it all together and make sense of it. A lot of technical traders will say that all you have to do is read the charts and it’ll tell you everything you need to know. Which, by the way, is true.

But, you have to remember who moves the market. And what are they thinking. From what I’ve come to learn, is this. The central bankers are moving the currencies. Also, big institutions whose world revolves around moving their (big) money around. They have their reasons. And I don’t think it’s all purely speculative. I believe there are intelligent minds, with intelligent reasons behind their money. Their not dummies. This is what they do for a living. Right?

Well, with all that nonsense, I’ll just leave you with this. This is my favorite place to go to for some good fundamental data on each of the countries.

With a lot of reading, research, and study you can educate yourself on what’s truly important, in regards to the reasons behind what’s really moving the market. Just keep in mind the time frames. The shorter trends will stem from technical reasons. The longer trends will stem from fundamental reasons.

Try researching what this means. The smart money. I believe that’s who we want to follow (the big fish). This is probably the thing I’m always wondering about when I am looking at the charts. What’s the smart money trying to do? Surely they are not the one’s who are setting traps, stop hunting, playing games, all over the place…etc.

Well Andressa, these are a lot of things I think about.
You know what I do, sometimes? I’ll go on tradingeconomics and just compare a whole bunch of data between 2 country’s. It’s fascinating stuff. You can really get to know a country by looking at where their money goes to. Is there more money coming in to the country or going out? Who knows how to balance their budgets? How well off are the citizens (per capita stuff)? Things like that.

Well, that stuff might not relate to trading, but you can ask other more pertinent questions, maybe.

Hope this helps some.

FA is much more simple than most guys would have you believe - and it is the market’s foundation - TA are the blocks - both need each other.

Mike mentioned sentiment - this word encapsulates the notion of FA, it is the roots from which market price grows.

Imagine this - you are the most powerful person in the world, your currency is in your view too high so you take steps to lower it. First thing you do , takes a little while but you get your own guy in charge of your country’s Central Bank.

Should be plain sailing - but yet check out USD since Jerome Powell became Fed Chairman.

Then again more recently - the President kinda gave up on talking the dollar down - 'It’s a great time to have a strong dollar" (Fox News May14 2020)

So what happened the dollar since that date?

Sentiment - fear and greed - the market is made from money and those are it’s drivers - no-one else :slight_smile: