The Real Fundamental Analysis

Alright, the amount of misinformation out there about Forex fundamental analysis is staggering.

REALLY… staggering.

So, let’s change that.


Well, what about I show you step by step how fundamentals are properly done?

And not just by throwing at you some random textbook theory that you won’t have any idea of how to put into action.


Let’s take the fluff out of it and let’s get straight into the REAL stuff.

I will use this thread to show you some real trades, some real fundamental analysis put into practice.

Just step by step, detail by detail, trade ideas explained all the way from just theoretical idea to practical trade.

The logic, the reasonings, the stories, the headlines, everything that shows you how fundamental analysis is properly conducted.

NO hindsight stuff… except maybe for some educational bits here and there.


Alright, but before that…

Here are three aspects to keep in mind:

  • It won’t be what you think. You will see a whole different aspect of fundamentals, and well… that’s exactly the point.

  • This will be focused ONLY on medium to longer term trades. There is of course an application of fundamentals to short term intraday trading but we WON’T do that here on this thread… I’m sure you can understand that doing it here just isn’t practical, at all.

  • I won’t be sharing every single fundamental trade that I see, that would just end up being too confusing for what is the purpose of this thread. So instead, I will try to share ONLY the cleanest and most obvious fundamental trades with clear logic behind it so that you can see all the details to understand how it’s done.


Now you are probably thinking

Will this teach you how to make fundamental analysis yourself?

Well… depends.

Depends on what?

Depends on whether you can take proper notes, on whether you ask the right questions, on whether it fits your trading style but mostly… on whether you have the patience and discipline to actually take the time to read and understand everything over time.

Yes, patience and discipline.

Two great essential skills in trading, isn’t it?

Without a doubt.

Alright, with that said keep an eye out for the first post, will share when there’s a clean fundamental trade setting up.


I do hope this is not a marketing ploy set up.


Sorry if I made it look that way, that’s not the intent, I will be just sharing valuable insights, information, and fundamental trades to show and educate a bit on what fundamental analysis really is about.

Will share the first post as soon as there’s a clean medium term fundamental opportunity to trade. Right now there’s not a lot across the board as there’s a big CPI release scheduled for Wednesday that will shape the sentiment for the next couple of weeks, so waiting for that.

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you made not only the post look that way, but your profile text, too - your post above reads like a sales page, and the link in your profile is apparently to a sales page - if this isn’t “forum spam”, what is?!


Sorry again guys, that’s not the intent of this thread, I have been around this forum for a while already and I realized that this particular section lacks some proper fundamental analysis insights that are shared consistently and professionally so I thought to jump in with this thread.

If that’s ok I will be happy to add some value here, just valuable fundamental insights that will be both useful and educational.

I will share the first post as soon as there’s a clean fundamental trade to illustrate and explain. Like I said, currently there isn’t a lot across the board as the CPI tomorrow will be the catalyst for the next trends depending on how it prints, so a bit of patience needed.

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other members here seem to be able to do that without having a link in their profile to a squeeze-page from which they’re building an email list for obviously commercial purposes

why aren’t you?


There’s an appropriate section to include a link in the profile page so that’s a natural thing to do if you have something to link to? Like a website or a social media account. I have been around this forum for a while and that option is always been there, if it’s not ok now please just let me know.

As I said, my intent with this thread is to just share valuable fundamental analysis, both insightful and educational, I haven’t mentioned and I won’t mention anything with self promotional purposes.

With that said, let’s talk fundamental trading…

I will share the first bit of insights over the next couple of hours to prepare for a potential trade opportunity for the CPI tomorrow.

“like a website or a social media account” sounds very innocent and non-commercial, doesn’t it?

yours, in complete contrast to that categorization, is a link to a squeeze-page from which you’re building an email list - surely you can see that that’s very different from how you’ve tried to make it sound?

it’s also very different from what any other non-paying, not-openly-commercial member here is doing, isn’t it?

Since I mentioned the upcoming CPI two times already maybe I should share a bit of a preview for it.

So… I’m sure you know that inflation right now is all that matters for the FED.

The stickier inflation is, the more the FED has to hike rates.

As of right now, the FED is expected to hike at least one more time, with some expectations priced in for another 25bps hike on top of that.

That’s coherent what the FED has been saying recently:

But mostly, on what Powell has said at the latest FOMC rate decision where yes they kept rates on hold but pointed to two more hikes:

And that’s where the CPI tomorrow comes into play.

Inflation right now is a BIG macro story, each CPI release drives the FED’s next move and so each and every print is a catalyst for volatility and fresh sentiment for the market.

So that piece of data will end up being an important number for the decision of whether the FED needs to hike at the upcoming FOMC, but mostly, whether they will need to hike more after that.

And that specific sentiment is going to end up deciding whether the Dollar can turn around and strengthen or… soften further.

So, the headline is expected to come down from 4% to 3.1%.

Which is a BIG move by the way. Not that far from the FED’s 2% target. Yes, they target core CPI and not headline, but still.

Anyway, if you noticed over the past couple of days the Dollar has been on the weak side.

That’s first because of the soft US numbers from Friday.

But mostly, because of the expectation for this big drop in inflation on Wednesday.

That’s called technically “front running”. When traders start pricing a certain scenario way ahead of the actual number.

I mean, the CPI is so obviously expected to be soft that traders are selling the USD in anticipation of that.

Great, because that creates a potential fundamental opportunity.

If inflation prints ABOVE expectations on Wednesday that would be a perfect trigger to short EURUSD and ride what should be a fresh bearish sentiment all the way down to 1.07.

It’s a very low probability scenario, but that’s the point.

It is so out of question that if it happens it’s going to trigger Dollar buying for a good while, in other words, start a fundamental trend that will bring EURUSD all the way to 1.07.


It’s an unlikely scenario but it’s a scenario that if it triggers would give a pretty good trade.

Ok, but what if inflation prints soft as expected?

Simply, no trade.

The Dollar will most likely just continue to weaken and EURUSD will push through the highs above 1.11.

So would it be worth a long if the CPI is soft?

Kinda, but it would need to be a lower timeframe entry with a not so favorable risk reward and right into technical resistance. Those can get a little tricky so for now let’s keep it simple.

The plan gets triggered ONLY on a strong CPI print, and I mean at least 0.2% above consensus.

But again, keep in mind…

The CPI is highly unlikely to print that much above consensus, but it’s a scenario to have in mind anyway because if it plays out, there will be an obvious USD long to take.


Just to clarify, does “exceeding expectations” refer to a lower CPI number or a lower CPI print than the expected lower figure? In this case, does it mean that inflation improves and strengthens the dollar, resulting in the depreciation of EURUSD?

Soft means higher cpi number and worsen inlfation right? Just want to make sure i got this right.

It’s a marketing message, but a professional one.

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When we talk about inflation “exceeding expectations” means above consensus, so above the expected number. In this case, it means that inflation worsens and so it is “stickier” than expected and the market would start to expect more rate hikes from the FED which would end up being bullish for the Dollar.

In this case “soft” means below expectations, or below consensus, so cooler inflation than what is expected. That leads to less rate hikes expected from the FED which is bearish for the Dollar, especially against currencies where central banks are expected to hike rates a couple more times like the ECB and BoE.

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Again, remember that for the CPI today this particular idea of EURUSD shorts all the way down to 1.07 triggers ONLY on a meaningful print ABOVE expectations.

I’m talking at least 0.2% above consensus on the headline number.

And I know, it’s highly unlikely…

It is way more likely that inflation keeps on cooling but that’s the point.

A surprise above consensus is NOT expected, and that’s where some of the best fundamental trades take place, when the market is priced for something but the whole context shifts.

So, keep in mind, if inflation is soft:

If inflation prints surprise higher:

The market would need to price MORE rate hikes from the FED, which would stop out all the Dollar shorts positioned for a soft print and mostly… trigger fresh Dollar buying.

So as explained, shorts on EURUSD all the way down to 1.07 in that context would be extremely attractive.

Thanks for the clarification. I got it all wrong. Especially the part about the feds raising interest resulting a bullish dollar. :sweat_smile:

I have a question. As you can see from the chart, for USDJPY, market participants have been shorting the dollar since the beginning of the current week. Does this mean institutional traders anticipate a lower CPI print (inflation improving)? Or is it due to a weaker-than-expected NFP release?

Also, is it possible that, regardless of the CPI data later tonight, the USD will strengthen due to the market pricing in the result of USDJPY tumbling since Monday? So long as the CPI number is not higher than expected ( inflation worsening )

Soft CPI on all fronts, headline and core, all soft so…


As you also probably can see there is still some room on EURUSD to reach the round number at 1.11 and there have been already some opportunities to go long on some tiny dips but again…

For now keep in mind the macro context

Inflation is softening and that will lead to LESS rate hikes from the FED.

To be precise, they will likely hike just one more time and then done, unless the inflation picture turns around at one point.

What does that mean for the Dollar?

That the fundamental story is bearish, especially against the currencies where the respective central banks are on track to hike further like the ECB and BoE.

So expect the likes of EURUSD and GBPUSD to be supported on dips at least for the next week or so, then obviously things can turn around with various developments but for now… it’s likely EURUSD gets near 1.1150 or so just on this soft CPI print.

Worth a long?

Depends, depends if you see any setup, technically price is hitting straight into higher timeframe resistance and the risk reward in going long at these levels is NOT favorable.

So, you get the point.

Yes, that’s called front running, when the market moves in anticipation of an event, so “pricing” that event ahead of the actual number.

Keep in mind tho, it is NOT a rule.

I mean, if you see the market moving in a certain direction ahead of an important event that doesn’t always mean “smart” traders are positioning in advance. No, it’s more complex than that and it requires a bit of context as it could just position squaring ahead of the volatility, could just be hedges, and many things.

But in this case, the CPI was widely expected to come in soft so those were traders positioning with that expectation in mind.

You can see the story pretty clear in EURUSD and GBPUSD with the price action in the days ahead, and now.


And there it is, 1.1150 on EURUSD already…


If there’s one VERY important aspect to understand about fundamental analysis is that it is about narratives, stories, and sentiments.

Think about it this way

When the market is trending there is ALWAYS a fundamental story driving that trend.

Understanding why the market is moving in that direction and understanding the logic of that story driving the trend tells you whether you can expect the market to continue moving in a certain direction or not.

Read that again because it’s quite an important part.

But let me show you a bit more context.

In this specific case the sentiment after the CPI was clear…

In other words…

The prospect of fewer hikes from the FED is bearish USD.

And that right now is the dominant fundamental sentiment across the board, and that as a result is exactly the trend unfolding across Dollar pairs.

So here’s the point again…

Fundamental analysis is about understanding the story, the narrative, the sentiment moving the price.

Once you know that, you can know whether that fundamental context should continue or not.

In other words…

Whether the trend should continue or not.

Anyway, with that said.

Should this Dollar weakness continue?

Well, the question needs to be…

Is this fundamental context likely to continue?

Yes, it is. Because inflation is softening and that will naturally lead to a softer FED. That’s bearish USD and that story should continue.

But of course, keep well in mind the technical aspects too…

I mean, the Dollar weakness has moved quite some distance already, is EURUSD like to tap 1.12? Yes, but there will be a pullback at one point too so don’t chase longs at these levels, if you want to try to ride the move wait for the technical side to give you a setup.

That’s how fundamental analysis complements with technicals.

Fundamentals to understand the direction a currency or a pair should move, technicals for timing the entry with a good risk reward at the right levels in that direction.



And EURUSD hit 1.12 already with little to no pullbacks…


Even more USD weakness ahead?

Very likely, but keep in mind the timing is perfect for a technical pullback now so do NOT chase Dollar shorts at these prices.

Something to keep well in mind.

Because you know…

The market moves a lot, traders that missed the move end up chasing right when the move is topping and they get squeezed in a normal and natural technical pullback, and then… they get stopped out right before the market continues the expected trend.

Classic, right?


Timing the entries right matters, quite a bit.

So again, that’s where technical analysis comes into play with fundamental analysis.

Fundamentals for assessing the direction, technicals for timing and nailing the trade entry at the right levels.

It’s NOT just one or the other, it’s both.

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Hi all,

I would like to discuss the strength of the USD based on the expectations from the Economic calendar.

Here are the upcoming events:

  • (Monday) Empire State Manufacturing Index, Previous: 6.6, Forecast: -3.5
  • (Tuesday) Core Retail Sales m/m, Previous: 0.1%, Forecast: 0.4%
  • (Thursday) Unemployment Claims, Previous: 237K, Forecast: 242K

According to the explanation provided by FF, for the Empire State Manufacturing Index: When the ‘Actual’ is greater than the ‘Forecast’, it is good for the currency. Since the forecast is less, it suggests a weaker USD.

According to the explanation provided by FF, for Core Retail Sales m/m: When the ‘Actual’ is greater than the ‘Forecast’, it is good for the currency. Since the forecast is more, it suggests a stronger USD.

According to the explanation provided by FF, for Unemployment Claims: When the ‘Actual’ is less than the ‘Forecast’, it is good for the currency. Since the forecast is less, it suggests a weaker USD.

Based on this information, may I presume that for Monday, we should continue shorting the USD if technical analysis aligns with the bearish fundamental expectation. However, the bearishness may be short-lived if the actual release on Monday meets or exceeds expectations, leading to a technical pause in the bearish move. Nonetheless, starting from Wednesday, the bearish move may resume when technical analysis aligns with weaker unemployment claims expected on Thursday?

Then again, the fundamental forecast for both NZD and GBP on Wednesday is pointing towards a weaker NZD and GBP, which only further exacerbates the bullishness of the USD during its technical rest.

Pay attention mostly to the retail sales this week for the Dollar, that is the potential catalyst to start a squeeze of all the late Dollar shorts.

I will share a few thoughts on the market later during the day with the plan for a potential trade setting up.