Fundamental Analysis for Trading Currencies

Last Updated : Tuesday 28th June 2022

Written By Tim Baudin, Forex Trading Instructor

Fundamental analysis is different in the case of forex trading.

In forex trading, economic indicators are used to measure and compare the economic condition of currency pairs.

1. Introduction to Fundamental Analysis in Forex

Fundamental analysis is the valuation of an asset based on financial and economic conditions. In the stock market, financial statements of listed companies are used to find the intrinsic value of the company.

But, in the case of the Forex market, there is no financial statement of a country.


2. Leading Economic Indicators and Their Affects on Forex Pairs

In the Forex market, the fundamental analysis considers the economic, political and social factors for one currency relative to the other currency of a currency pair.

Some of these factors have a heavy impact on the currency pair while others may not have a significant impact on the currency pair.


3. Forex News Trading Strategy – How to Trade the News

Trading the economic news in the forex market is another profitable trading method. In this trading method, traders trade just before or after the news releases. It also carries a significant amount of risk.

In this trading method, traders trade just before or after the news releases.


4. Using the U.S. Non-Farm Payroll Report in Forex Trading

The U.S. Non-Farm Payroll report is published by the U.S. Bureau of Labor of Statistics. This report is also known as NFP. This is a key economic indicator for forex trading.

This Non-Farm Payroll (NFP) report publishes the total number of paid workers in the U.S. excluding farm employees, private household employees, and employees of non-profit organizations.


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