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Forex Market Analysis – Technical vs Fundamental

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Forex Market Analysis

Before entering the Forex market you should do your Forex market analysis well. As discussed earlier fundamental analysis can have a major impact on the market prices on certain occasions. Fundamental events with a potential to move the market, and potentially change the market trends, might be political happenings, geo-political events or announcements of macro-economical news.

Forex technical analysis is the method of analyzing what we already know from the market. There is a wide variety of technical indicators available ready for Forex traders. Technical indicators is of great assistance for us to make the best prediction of the market movements. Forex technical indicators are categorized very well. Some are indicating the trend movements while others are oscillator based etc. A great example is John Bollinger who developed the Bollinger Bands back in the 80s. The Bollinger Bands are used in Forex trading for measuring the market volatility.

Forex Market Analysis – How to Analyze the Market?

Your Forex trading plan might include both fundamental and technical analysis. As we have clearly described, fundamental analysis can give a good prediction on how important events can impact the Forex market. Perhaps the best example is how the last US President election changed the direction of the American markets. Short time after the Dow Jones index reached its all time high level.

However, if a fundamental event is leading to major changes in the market, there are technical indicators who can explore to us if those changes are consistent. On the sole side, technical analysis provides a wide variety of methods of analyzing provided market data. The result will be a fairly good prediction, dependent on the technical indicators in use, of the next turns in the Forex market.

We have both the experience and belief that one method do not exclude the other. Technical indicators will always be with us to make the best market predictions. In addition, fundamental events plays a major role in detecting potential market moves.