Fundamental and Technical Analysis

There are two main forms of analysis which are used in Forex trading ? fundamental and technical analysis - and here we are going to look at exactly what is meant by fundamental analysis.

At its simplest, fundamental analysis looks at both economic and political conditions that might affect currency prices and Forex traders who make use of fundamental analysis rely on news reports for information about a range of things including inflation, growth rates, economic policy and employment rates.

Basically, fundamental analysis gives an outline of currency movements together with a broad view of economic conditions which may well alter the value of a specific currency.With this view in mind, Forex traders will then generally go on to make use of technical analysis to plot entry and exit points in the market and to add to the information gained from fundamental analysis.