Fundamental analysis is one of two popular approaches to Forex market analysis and describes methods of present and future evaluation determined by social, economic, and political variables. This approach is used to forecast long-term Forex market movement in the Forex market.Using fundamental analysis strategies requires a basic understanding of supply and demand, meaning - the commodity being exchanged in a particular currency. As the currency value of depends on its own country's economic stability, global or local economic changes can impact currency rates. Fundamental analysis itself is broken down into two broad subcategories: Capital Flows and Trade Flows.Capital Flows: a country's financial position, with other countries of the world, which is made up of its current account and capital account (or capital movement) over a given time frame.Trade Flows: the quantity or value of a country's bilateral trade with another country, and the subsequent impact that these flows can have on the value of a currency. In the Forex market, it means that importers are required to sell currency used to purchase goods and services being exported. This fundamental analysis feature is key and frequently provides insights into movements in a currency's price.

Posted by Anushka G at 6:04:00 PM