Fundamental analysis for forex

The fundamental analysis of forex trading is based on the consideration of trends as they are caused by events, politics fundamental analysis for forex economics. Movements in a given currency are, to some extent, dependent on the geopolitical context of that country, the policies of its central bank, and the country’s economic context.

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A good, basic example is the policy of quantitative easing announced by the US Federal Reserve about two years ago. This policy, insofar as it affected only currency, involved maintaining a very low rate of interest on the US dollar. It also involved increasing the supply of US dollars. Obviously, whenever supply increases and interest rates decline, the value of a currency also declines at least to some extent. Fundamental traders would have undoubtedly strategized for a weaker dollar in their trading. Technical traders would have ignored the Fed’s policy, and just observed where the dollar hit a support floor in a given period. There are, however, points when even technical traders must look up from the charts.