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How to Do Forex Trading Fundamental Analysis?

fundamental analysis

Fundamental analysis is a tool used for analyzing economic financial market movements with a goal of establishing price forecasts. Forex fundamental analysis focuses on the general condition of the economy and studies various factors including rates, employment rates and employment, GDP trade and manufacturing. Fundamental analysis should therefore be considered as an umbrella that cover the factors affecting volatility and price of financial markets.

Learning about different factors to determine the value in forex is where the science of Forex Fundamental analysis lies. Understanding how to work together is the key to understanding the true value of every investment and trading vehicle, in this case currencies, is key.

Forex trading is a speculative business. It is done by market prediction. To realize the future market price movement, traders always do an analysis of the market in various ways. Fundamental analysis is a prime market for analyzing the subject. Forex trading news is the main source of fundamental analysis. So, a forex trader has to need vast knowledge about fundamental analysis and forex trading news combined.

What is fundamental analysis?

Fundamental “word means the basis of any matter. Forex market trading is related to any product’s basic thing which indicates that the product’s value increases or decreases, it is the fundamental of forex market trading products. Forex market’s main products are currency pairs, some metals, energies, index, etc. Which geopolitical facts, economical conditions, central banks monetary decisions, such as any elements are able to make forex market trading products demand and supply increase or decrease is the subject or part of forex market fundamental analysis. Based on some data, which are always forex market trading news, do the fundamental analysis. This type of analysis has only one objective view -is the data or news has given which bias? Is the bias good for specific currency or any other products? If it is good, it could get high demand and rate would be high, same it is bad it could be less demand and price will become low.  

What is forex trading news?

Forex news is the information, facts, data, announcement, geopolitical condition, etc which is able to impact upon forex market and forex market price gets movement, is called forex trading news.  Generally, forex trading news is published as pre-scheduled every day, which is known as an “Economic calendar”. The Economic calendar contains various economical indicating data, central bank program, election date, geopolitical occasion date, etc. Many forex news providing sites, tv channels, newspapers, broker houses, forex websites are releasing this forex trading news every day.

Some main fundamental analysis items with forex trading news

Forex trading news can happen at any time and it could be an important fundamental analysis item at any time. But we are wanting to now share some very common and regular fundamental items with regular forex trading news-

Central Bank Interest Rate Decision and Monetary Policy

The central bank is the owner, supplier, and controller of any currency of any country. The central bank sets the currency exchange rate in various ways. They can make their currency exchange rate high or low. Sometimes the central bank wants to lessen the availability of their currency and starts to tighten monetary policy. Like – tapering, interest rate high, and asset purchase high. This way the central bank can raise their currency rate hike.

A central bank can devolve its currency randomly. If the central bank wants to see their currency low exchange rate then take several steps for making the currency weak. And the central bank takes the losing monetary policy. Like as, monetary easing, intervention, stimulation, interest rate cut, extreme supply of currency, etc. So if you want to do a fundamental analysis of any currency then you must first need to know about the specific currency’s central bank monetary policy. What does the central bank want to do? Do they want to make their currency strong or weak? Are they cutting or hiking the interest rate? Does the central bank want to reduce the supply of the currency or wants to make more supply of the currency? By correctly realizing the central bank policy you can do perfect fundamental analysis upon any currency. And build your fundamental strategy for trading.

Central Bank Interest Rate Decision and Monetary Policy

For this fundamental analysis, you have to need the exact data of the central bank. It only can give you a forex trading news provider. Yes, there are many news providers available to provide the central bank monetary policy decision and interest rate decision at a definite date and time. Every month in the economic calendar several central banks’ monetary policy meetings and interest rate decision announcements, central bank press releases, are published as high-impact forex trading news by many forex news service providers. You can get pre alerts about the date and time of this central bank news. Because as previously it has been showing in the economic calendar in news provider sites before releasing the news. After getting the news result you can do fundamental analysis. If the central bank cuts the interest rate you can take a sell decision or hike the interest rate you can take to buy the currency.

Central bank Governor or high official comment and speak is a great forex trading news and an important item of fundamental analysis. It also publishes in forex trading news service as high impact forex news. Its publishing date and time are always pre definite. You can do a fundamental analysis by the news of the central bank governor speaking. Which comment he/she has expressed? The currency would be high value or low value?

Employment data

The employment picture of any country can present the economical exact condition of any country. The less unemployment and better employment conditions show the better economical condition of any country. If the economic condition is good in any country, the currency of that country is to be strong. Because the demand for the country’s currency becomes high. The high employment means the industrial and service sector’s production is high. And high domestic production can increase international business. The more international business makes currency demand high.

So employment data is the important fundamental analysis part in forex trading. And it is very high impact forex trading news. Like US employment data, Non-farm payroll (NFP).NFP is the high-impact forex trading news. If The NFP labor data is good as expected it indicates the better economy of the USA. And the NFP is bad. It shows the worst economy of the USA.As per the news of NFP you can do fundamental analysis upon the US dollar and take buy-sell decisions.


Accept this there are some important fundamental analysis items and forex trading news you have to know. Like as- Consumer price index (CPI), gross domestic products (GDP). General election, the presidential election of USA, Opec meeting, retail sales, Sudden unexpected situation, natural disaster, war, all are which impact forex market price movement. Only fundamental analysis by forex trading news cannot remain profitable in forex trading. You have to know proper technical analysis and money management also.