I agree with Rhody... and he knows his stuff
Often times, news are 'used' by market makers to move price, rather than the other way round:
this means that it is not the news that moves the markets per se, but rather it is an expected time
of high volatility which gives algorithmic trading the opportunity to move prices quickly ...
Remember that no human trader at institutional or hedge-fund level would 'trade the news'... I really
think that this is a retail trader obsession, trying to catch volatility when professional 'humans' do not...
Traditionally, human traders would 'trade the fade', waiting anything between ten and twenty minutes
after a news release, for example, to see how price had digested a news release... Yet, sometimes, like
in the case of the FOMC rate decision last Wednesday, all you get is a flash of volatility in the immediate
few minutes of the news release, and then all goes quiet... This is because machine/algorithmic trading
has a draining effect on liquidity (a topic of much debate - some argue that this adds stability AND liquidity,
while others say that it limits opportunity for non-algo traders (e.g. investors)).
Anyway, fundamentals are indeed concerned with longer-term, macroeconomic themes, rather than price
itself as a pip-by-pip analysis: you must specialise in following a theme...
For me, for instance, this has meant, in the last eight months, specialising in following the 'global risk aversion'
theme, holding long-term positions (short British and American equities), as well as a Pound-resurgence theme
(long Pound versus Euro and Kiwi): this is based on my own conclusions and analyses of a series of factors, not
to do with 'technicals' per se but more with continued mid-term and long-term evaluation of sentiment for EuroZone
and New Zealand, in the case of my Pound long positioning, and of sentiment for world equities and the 'risk-off'
scenario, in the case of my S&P500 and FTSE100 shorts: this evaluation, or fundamental analysis, has little to do
with day-to-day news releases, with 'technicals', etc. although I do look at them and they help building a picture
because by monitoring price reactions to those news events you can sense how sentiment may be building in your
favour or staying flat, or starting to turn (slowly) against you...
Fundamental trading done on this scale is like investing in stocks, but I think that it is used in Forex by institutions
and retail traders can position in a similar way, using very low leverage (I use 1k positions) and letting a 'theme'
evolve through time. I have sat through a drawdown of over 5,000 pips and thought nothing of it; my target is
between 5,000 and 10,000 pips in total, so when you trade like this you are not concerned with daily fluctuations
or 'flash' moves after news releases, unless those news releases fundamentally change global themes, like 'risk-on'
and 'risk-off'... For example, the Swiss Franc catastrophe of January 2015 did not change the course of world equities...
the S&P500 did not crash because of it, for example, nor did the FTSE100... Yet the Chinese market crash of Aug. 2015
did have a greater impact...So, for example, if you were a long-EUR/CHF or long-USD/CHF trader in January 2015,
your trading world would have probably come to a cruel end that day, and you would have thought that some kind
of trading apocalypse had come to the markets, where, instead, a long-term/'investor'-type trader would have looked
beyond that, provided that they too had not suffered too much damage in their positioning...
If you look at how much ground the USD/CHF pair has recovered since then, for example, or how much ground
the S&P500 has recovered in the months after the Aug. 2015 market crash, you can see how little relevance
some reactions can have when seen from a wider angle... It is like looking at the Earth from space, where all
seems quiet and peaceful, versus being on Earth and knowing its troubles when you are directly affected by them...