Fundamental Analysis of Forex



The definition of fundamental analysis is ―a method of evaluating a security that entails attempting to measure its intrinsic value by examining related economic, financial and other qualitative and quantitative factors. Fundamental analysts attempt to study everything that can affect the security's value, including macroeconomic factors (like the overall economy and industry conditions) and company-specific factors (like financial condition and management). The end goal of performing fundamental analysis is to produce a value that an investor can compare with the security's current price, with the aim of figuring out what sort of position to take with that security (underpriced = buy, overpriced = sell or short)‖. This means that fundamental analysis is basically looking out at the world and seeing the potential issues that could affect currency and anticipating how these issues will affect the forex market. There are a lot of potential issues. For example, the crisis in Greece is affecting the entire European Monetary Union, and in response the Euro became incredibly volatile.