top of page

The missing ingredient

Learn Forex Fundamental Analysis

"Many don't use fundamental analysis. If they did, their win rate would increase, and they would find trading much more rewarding.

Let me share with you how I use fundamental analysis as part of my trading strategies"

Question: What is fundamental analysis?

Answer: Fundamental analysis is the analysis of economic data and events that impact financial markets

Question: Which economic figures and events are important for Forex fundamental analysis?

Answer: The leading market-moving economic figures are 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, 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 forms of analysis.

Question: How do you use fundamental analysis in Forex trading?

Answer: Let me show you in my free Forex Fundamental Analysis Course below. This course teaches the absolute basics and is ideal for fundamental analysis dummies.


In Forex, Fundamental analysis studies economic indicators, which include economic figures, central bank decisions, and news events to forecast future price direction. It is used by almost all professional traders and trading institutions.

Market fundamentals are what drive price. They give price direction and sentiment. Technical analysis can influence price action, but it is not the reason for price direction.

A well-rounded Forex trader will use technical and fundamental analysis in their trading plan.

A key to fundamental analysis is understanding economic figures, central banks, interest rates, and inflation figures. All these areas will be covered in this course.

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

Click on the video below.

Fundamental analysis intro

Inflation, Central Banks, and Interest Rates

The most significant ongoing factor influencing price movement and direction is interest rates.

Interest rates are the driving force behind the Forex market. Generally speaking, a rise in interest rates (a rate hike) is good for currency - it appreciates its value. A drop in interest rates (a rate cut) is bad for a currency - depreciating its value.

Inflation is the best forecaster of future rates. Too high inflation generally means lower rates. Too low inflation or disinflation means typically higher rates. Monitoring inflation is the best way to predict future rates.

A central bank is primarily responsible for managing its country's inflation, amongst other duties. They are the interest rate decision-makers.

Some of the World's central banks include:

The Bank of Japan (BOJ)

The Bank of England (BOE)

The Bank of Canada (BOC)

The Federal Reserve (Fed)

The European Central Bank (ECB)

The Reserve Bank of Australia (RBA)

The Swiss National Bank (SNB)

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

Forex Interest rates

Economic Figures, Politics, and News Events

Other factors that impact the price of currencies are:

Economic Figures - this includes, but is not limited to, unemployment rates, trade balance, PMI figures, retail sales, current account balances, and GDP growth.

Good figures are a positive indicator of a country's economy, whereas bad figures can be negative. However, economic figures have to be analysed along with interest rates and other market-moving events.

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, frictions with trade, riots and unrest, pandemics, war, and freak weather.

You can view past economic figures and upcoming figure releases at Trading Economics.

Key Terminology

Interest rates - the set base rate of interest charged on loans and other liabilities

Forex economic figures

How to use Fundamental Analysis to Trade Forex

bottom of page