ACTUAL FOREX TRADING
Free Forex Fundamental Analysis Course (2027)
"Many don't learn fundamental analysis. 'It is too complicated', they say. Let me show you how simple fundamental analysis is.
I believe this is the BEST online Forex fundamental analysis course for fundamental basics"
Question: What is fundamental analysis?
Answer: Fundamental analysis is the analysis of economic data and events that impact financial markets. Traders use it to help forecast prices. For example, a trader may analyse the current fundamentals to project whether the euro will likely strengthen or weaken.
Question: Which economic figures and events are important for Forex fundamental analysis?
Answer: Key market-moving economic figures include interest rates, inflation rates, unemployment rates, PMI figures, retail sales, trade balance, current account deficit figures, jobless claims, and GDP growth.
Economic events that impacted the Forex markets in recent years are political elections, government instability, war, referendum results, fear of recession, trade tensions and trade wars, and pandemics and disease.
Question: Which is better, technical analysis or fundamental analysis?
Answer: Some traders swear by technical analysis. Others by fundamental analysis. The truth is that both types of analysis are precious and worth using. The best Forex traders use a combination of both.
Question: How do you use fundamental analysis in Forex trading?
Answer: In my free Forex Fundamental Analysis Course below, I will teach you the basics. The course is ideal for those new to Forex fundamental analysis.
Forex Fundamental Analysis Basics: Introduction
In Forex, Fundamental analysis studies economic indicators, including economic figures, central bank decisions, and news events to forecast future price direction. Almost all professional traders and trading institutions use it.
Market fundamentals are what drive price. They give price direction and sentiment. Technical analysis can influence price action, but it doesn't drive price direction.
A well-rounded Forex trader will use technical and fundamental analysis in their trading plan.
A key part of fundamental analysis is understanding economic figures, central banks, interest rates, and inflation. This course covers all these areas.
Key Terminology
Fundamental analysis - the study of economic figures, central bank decisions, and news events to forecast market direction
Economic indicators - economic figures, interest rate decisions, and events that can signal price direction
Forex Fundamental Analysis Basics:
Inflation and Interest Rates
The most significant ongoing factor influencing price movement and direction is interest rates. Let this be it if you learn just one thing from this course!
Interest rates drive the Forex market. Generally speaking, a rise in interest rates (a rate hike) is good for a currency - it appreciates. A drop in interest rates (a rate cut) is bad for a currency - depreciating its value.
A country's inflation rate, GDP growth, and employment figures are the best forecasters of future interest rates. Track and monitor these to improve your interest rate forecasts.
Too high inflation generally means higher rates. Too low inflation, or disinflation, typically means lower rates. This is because central bank rates significantly impact inflation. Raising rates typically reduces inflation. Cutting rates typically increases inflation.
Low GDP growth can discourage a central bank from hiking rates, as higher rates have a potential negative impact on economic growth - a central bank doesn't want to hike its way into recession.
The labour market also influences central bank decisions. Higher interest rates often increase unemployment. Lowering rates often decreases unemployment. A central bank will review unemployment and employment data when making rate decisions. It doesn't want to be held responsible for unemployment that is too high or a tight labour market (i.e., unemployment that is too low).
Monitoring inflation, employment, and GDP growth is the best way to predict future rates.
A central bank will cut rates when inflation is too low to stimulate economic activity and raise inflation. A central bank will hike rates if inflation is too high to reduce economic activity and bring inflation down.
A central bank is primarily responsible for managing its country's inflation and economic growth, amongst other duties. They are the interest rate decision-maker.
Some of the World's central banks include:
The Bank of Japan (BOJ) - https://www.boj.or.jp/en/
The Bank of England (BOE) - https://www.bankofengland.co.uk/
The Bank of Canada (BOC) - https://www.bankofcanada.ca/
The Federal Reserve (Fed) - https://www.federalreserve.gov/
The European Central Bank (ECB) - https://www.ecb.europa.eu/home/html/index.en.html
The Reserve Bank of Australia (RBA) - https://www.rba.gov.au/
The Swiss National Bank (SNB) - https://www.snb.ch/en/
Key Terminology
Interest rates - the set base rate of interest charged on loans and other lending
Inflation - the rise in the cost of goods and services
Deflation - the decline of inflation
Disinflation - the opposite of inflation (negative inflation). The decline in the cost of goods and services
Central banks - the bank with responsibility over interest rates and monetary policy
GDP growth - Gross domestic product. The total value of all goods and services.
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Forex Fundamental Analysis Basics:
Economic Figures and Events
Other factors that impact the price of currencies are:
Economic Figures - these include, but are not limited to, unemployment rates, trade balance, PMI figures, retail sales, inflation rates, and current account balances.
Good figures are a positive indicator of a country's economy, whereas bad figures can indicate economic slowdown or harm. However, you must analyse economic figures alongside interest rates and other market-moving events to gain an accurate perspective.
Politics and News Events - anything impacting a country's economy can cause market volatility. This includes, but is not limited to, a lack of government stability, a change of government, trade frictions, riots and unrest, pandemics, war, and freak weather.
You can view past economic figures and upcoming figure releases at Trading Economics.
Key Terminology
Unemployment rate - the percentage of the labour force who are unemployed and actively seeking employment
Retail sales - the total revenue generated in the retail sector
Manufacturing PMI - an indicator which signals whether the manufacturing sector is expanding or contracting
Services PMI - an indicator which signals whether the services sector is expanding or contracting.
