Fundamental analysis in Forex Trading

Fundamental analysis is the study of economic, social and political factors of the country that can affect the demand and supply of assets. Fundamental analysis forecast how these factors influence the movement rates of stocks, currencies and commodities.

Fundamental analysis is very important in forex trading or fx trading as every forex trader wants to learn how to forecast the price trend and fundamental analysis can help in this regards.

If you are a forex trader then it is very important to understand the difference between fundamental analysis and technical analysis. These two types of analysis are frequently used by forex traders to forecast the price trend.  Fundamental analysis focuses on monetary policy and economical factors of the country while technical analysis focuses on price action as well as market performance.

The goal of almost all analysis in forex trading is to get a forecast and profit earnings from the price movement in the future. Fundamental analysis study the social, economical and political factors which concern with supply and demand of assets. If economic, social and political condition of any country is good then people would like to invest in the country and it means the price of the currency will rise otherwise the price of the currency will be decrease.