Part III. Fundamental analysis Commander in Pips: Now let’s talk about fundamental analysis, just in very general terms, as we already did about technical analysis. We will just point the major qualities of it. Once you’ve said that didn’t attend an Economics course in School. It’s a pity, because if you did, then the nature and subject of fundamental analysis would be easier to understand for you. Pipruit: So, may be we should skip it. Besides, I think I like technical analysis already. Commander in Pips: No way! I need to get some pleasure to see when you will suffer over it. Pipruit: Oh… Commander in Pips: …just kidding. But, seriously speaking, fundamental analysis is a real THING and TOOL. Besides, it’s very interesting and useful to apply it. Pipruit: Hmm, may be you’re right. Anyway, I can’t say definitely, until I’ll try it Commander in Pips: That’s right. In the beginning of our talk I just reminded you the major rule (since you skipped taking an Economics course), that the price of any asset is determined by demand and supply. So, if the demand becomes higher than the supply, then price starts to increase. If the supply becomes higher or, which is the same, demand becomes lower – then price starts to decrease. So, the subject of fundamental analysis is the investigation of which factors can and do have influence on demand and supply, and, in turn, on price and make price to change. Although there are a lot of such factors, all of them are well-known, as well as their possible affect on demand and supply. So, . . . Fundamental analysis is dedicated to the investigation of economic, political and social factors that have an effect on the currency value of a particular country relative to other currencies and the forecasting of these factors.