What should I do when conducting foreign exchange analysis?

In the basic foreign exchange analysis, basically, you are evaluating the business of the stock market or the foreign exchange of the country. If you find it difficult to value a company, you should try to value the entire country. This can be difficult, but some indicators can be studied to gain insight into how the country works. Some of the indicators you may need to study during foreign exchange analysis include: non-agricultural employment data, consumer price index [CPI], purchasing managers' index [PMI], durable goods and retail.

In the foreign exchange market, most traders use basic foreign exchange analysis to predict long-term trends. However, some traders conduct short-term transactions based on the responses of different press releases. You can post comments at many conferences that have as much impact on the market as any press release or metrics report. All of these meetings often discuss issues related to interest rates, inflation, and other factors that affect the value of money.

You should pay attention to two important meetings, the Humphrey Hawkins Hearing and the Federal Open Market Committee. For example, the Fed chairman’s comments on interest rates will cause market turmoil.

By reading the report and checking the comments, Forex Fundamentals analysts can better understand most long-term foreign exchange market trends. Keeping up with the development of the foreign exchange market, short-term traders can profit from extraordinary events. If you decide to follow a basic foreign exchange strategy, you want to keep your economic calendar at hand. Your Forex broker may also be able to provide you with real-time access to such information for your forex analysis.