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Chapter 21, Part I. Again about Fundamental Analysis Page 2

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 22, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

    Aug 28, 2009
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    Different data that are used in fundamental analysis could make different impacts on currencies, as on any other asset. Here the task of fundamental analysis is to tell us how price should react under force of some fundamental factor, such as growth of interest rates. Fundamental data itself could take different shapes. As macro data it could be in shape of some statistical numbers that are released on a predetermined schedule – GDP, Unemployment, housing market, production, sales, budget deficit etc. It could be regular central bank testimony and interest rate decisions, changes in fiscal policy, some reports of government authorities on employment, retail sales etc.

    Since information flow now happens very fast, anticipation of some event or data starts to move markets even before this event has happened or the data has been released. For those who know how to use this – the time before release is very happy one, since price could show solid moves, sometimes 100 pips or even more. That’s why there is so much expectations and rush around news time release – it’s big money time.

    Macro data and other components of fundamental analysis create major part of the information that is used in analysis. For those who can read them, they could tell how healthy an economy is and how strong its perspectives are. So, reality of the current financial world tells us that anticipation of some fundamental event or data is as important as this data or event itself or even more. But this is just the first task. Since each data is just a part of the puzzle, the trader who uses fundamental analysis has to be able to understand how this particular part could change the overall picture.
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