Forex macroeconomic indicators
It is no secret that there are two main methods of market research - technical and fundamental analysis.
The first type of analysis, namely technical, is designed to analyze the inertia of market movement, crowd behavior and psychological analysis of a particular category of traders.
The second type of research is based on the study of the country’s economy, its potential, as well as factors that may influence changes in the exchange rate of the national currency.
It is worth noting that both of these types of analysis are, one way or another, interconnected and effective.
However, it is worth clearly understanding that any strong changes in the quotes of the selected asset always occur on economic grounds.
Fundamental analysis cannot be carried out without initial data on the country’s economy, therefore, to inform investors, traders, as well as conscious citizens, the government and the largest rating agencies regularly publish macroeconomic statistics.
Forex macroeconomic indicators are statistics that are specifically published by the government of countries, as well as major rating agencies (institutions) to monitor the economy and the progress of its development for potential investors.
Forex macroeconomic indicators are the raw material for decision-making by traders and investors conducting fundamental analysis, which has a huge impact on exchange rates.
Statistics are published on a regular and ongoing basis. The degree of influence of macroeconomic indicators
According to the degree of influence on the market and exchange rates, all macroeconomic indicators can be divided into three groups, namely high, medium and low.
In order for you to distinguish macroeconomic indicators by the degree of influence on the market, we decided to divide them into groups and make a short list of each of them.
High degree of influence on the market
Macroeconomic indicators that have a high degree of influence on the market include the following statistics: gross domestic product ( GDP ), interest rate, consumer price index, report of the head of the Central Bank (depending on which country), unemployment benefits, balance of payments, quantity new jobs, refinancing rate, trade balance.
The publication of statistics, contrary to the expectations of investors, leads to strong exchange rate changes, until the end and formation of a new trend.
Average degree of influence on the market The
average degree of influence on the market includes the following macroeconomic statistics: volume of orders for durable goods, business activity index, consumer confidence index, industrial production index, labor productivity, changes in retail sales, unemployment rate.
The publication of statistics of average influence results in market activity ranging from 20 to 100 points. Low degree of influence on the market
Macroeconomic indicators with a low degree of influence include: utilization of production capacity, personal income, initial circulation of the unemployed, production orders, beige book, as well as a number of other minor weekly monthly macroeconomic indicators.
It is worth noting that the publication of statistics with a low degree of influence on the market may not appear at all on currency quotes , or the price movement will be within 20 points.
In order to get acquainted with each macroeconomic indicator and find out the principle of its calculation and the degree of influence on the market, go to the Analytics section - Fundamental analysis - Macroeconomic indicators and indices at the Alpari broker - https://alpari.com/ru/ .
The principle of using macroeconomic indicators on Forex
If we consider the principles of using macroeconomic indicators on Forex, they can be divided into two groups, namely trading on expectations and trading after publication.
Trading on expectations occurs by comparing expected statistical data from investors and past data publications.
It is worth noting that this approach provides the most profitable entry point into the market, but at the same time makes the trader vulnerable at the time of publication if the statistics diverge from expectations.
Trading after the publication of statistics news is a more popular option, however, to implement it you will need instant market execution of orders from the broker and no slippage.
Data on the publication of macroeconomic indicators for Forex, namely the exact time, current, previous and expected values, you can find in the special economic calendar .
In conclusion, it is worth noting that macroeconomic indicators are the very factor that makes the market move, and understanding and mastery of statistics makes these market movements more predictable for the trader.