FUNDAMENTAL ANALYSIS

The forces of supply and demand determine the value of currencies. Spec-ulation in the foreign exchange market (the FOREX) must be based on sound analytical principles. There are two radically different methods of forecasting where the forces of supply and demand are heading.


The first method as mentioned earlier is known as fundamental analysis.While I cannot list all the events that move the market, some of them include the forces of currency supply and demand worldwide, fundamental economic data, and political developments.
Unlike in the stock market, fundamental analysis in the FOREX is much more important. Although it is important to watch fundamentals when trading in the stock market, it is much easier to manipulate the data.
After all, where does the fundamental data come from that traders use to make their trading decisions?