Factors of fundamental analysis.

In order to use fundamental analysis in relation to Forex, you need to understand what factors have the maximum impact on the movement of currencies and how to correctly take them into account when planning new transactions and closing existing ones.

Factors of fundamental analysis are not only the main economic and financial news, but also other messages that directly affect the trend.

Therefore, you should be as careful as possible when conducting analysis.

Expectations and trends.

As practice shows, very often the anticipation of the release of a new message has no less active influence on the market than the news itself.

This happens due to the fact that there are a lot of different analytical agencies and analysts who express their assumptions about what this news will be like. For example, the interest rate will decrease or increase, or data on inflation and unemployment will change. It is the expectation factor that allows you to get a more stable profit, in contrast to sudden jumps when news is released, and if the forecast is confirmed, the profit can increase several times more.

Main factors.

These include messages on changes in the sphere of finance, economics and politics of the country that issued the currency in question. And also external ones - trust in a given payment unit, correlation with other currencies, etc. These issues are covered in more detail in the article “ Factors influencing the exchange rate .”

Power of influence.

The most powerful influence is exerted by unplanned news - reports of defaults, catastrophes and natural disasters, military coups and other troubles.

Positive messages also contribute to the growth of the rate, but they appear much less frequently. Psychological aspect - most traders know what news will have the greatest impact on the exchange rate, for example, the announcement of the Bank of Japan's intervention is always eagerly awaited by those who enter into sell transactions.

It is clear that its appearance will immediately cause an increase in the supply of currency and, as a result, a downward trend. There are also other options that cause an unambiguous reaction from the exchange - changes in discount rates, announcement of election results, messages about changes in monetary policy, changes in unemployment and inflation indicators. Lately, it has been quite difficult to predict 100% how this or that news will affect the market, this is due to the influence of factors hidden from the trader, so you should not base your trading entirely on fundamental analysis.

forex indicators installed in the trading terminal will allow you to check the received information and avoid mistakes when choosing the direction of the transaction.