Fundamental Analysis

A fundamental analysis (FA) is an analysis method that measures the intrinsic value of securities by analyzing economic, social, and political forces that affect assets’ supply and demand. Major fundamental factors include both macroeconomic and microeconomic data such as interest rates, GDP, inflation, unemployment, balance sheet, income statement, and other information that used to predict the direction of the economy and measure a company’s performance. In Forex, traders utilize fundamental analysis when deciding whether to enter or exit a trade. If a country’s current or future economic development is in good condition, its currency should appreciate. The better the economy of a country, the more foreign companies, and investors will be attracted to invest. This will bring more purchases of the country’s currency to obtain these assets.