Fundamental Analysis Basics

Fundamentals drive long-term currency trends. Understanding them gives you an edge.

Key Economic Indicators


Interest Rates

• Central bank policy rates
• Higher rates = stronger currency
• Watch Fed, ECB, BoJ, BoE decisions

Employment Data

• Non-Farm Payrolls (NFP) for USD
• Unemployment rate
• Jobs growth

Inflation

• CPI (Consumer Price Index)
• PPI (Producer Price Index)
• High inflation may lead to rate hikes

GDP

• Economic growth measure
• Strong GDP = strong currency
• Quarterly releases

Trading the News

Before Release

• Check consensus expectations
• Avoid holding positions through major news
• If holding, use wider stops

After Release

• Compare actual vs forecast
• Wait for initial volatility to settle
• Trade the trend that develops

Economic Calendar Must-Watch


1. Central bank meetings
2. Interest rate decisions
3. NFP (first Friday monthly)
4. CPI data
5. Retail sales
6. PMI data

Combining Fundamentals and Technicals

• Use fundamentals for direction
• Use technicals for timing
• Don't fight the fundamental trend
• Major levels + fundamentals = high-probability trades