The GDT Price Index shows the result of the most recent dairy products auction. It indicates whether milk and cheese prices are moving up or down. Interestingly, this can have a big impact on the value of the Kiwi especially when other major Asian region issues are on the back burner.

If you click on the detail box of this announcement you can see more information about the release. Because of its volatility, we like to trade the New Zealand Dollar NZD , especially against the Australian dollar and the Great British Pound.

You must be nimble for these pairs! So be careful. But just to see the outcome of one or two of the dairy auction announcements, test your skill, go back through previous auction dates and compare them to the chart dates for NZD in your Metatrader charts. As the NZD is impacted by dairy prices, the Australian economy is very much tied to China as its major trading partner.

NZD currency pair can quickly develop a major trend — or volatile price swings. Remember… Disciplined trading requires that you consider the potential for fundamental announcements. Keep track of them. Fundamental Announcements by Tom Dec 12, Forex Blog. Search for:. Recent Posts Fabulous Fibonacci!!

More Spooky Treats Trading Simply Spooky Automatically Update Kindle Content Using Indicator Alerts. Categories Books on Kindle Forex Blog Metatrader Tips Technical Analysis Uncategorized.

A good, hot meal. Financial security. Time with loved ones. If you understand these factors, you can make better predictions about how your investment might fare—just like you know how to predict that your uncle will get real cranky if you take him to a three-hour movie without going to lunch first. The collection of factors that impact currency prices create forex fundamental analysis. This guide will help you understand what fundamental analysis is, what factors you need to understand, the limitations of fundamental analysis, and how to get started.

Technical analysis will have you spending time with all those wiggly charts that traders are such big fans of. While different financial markets will have their own time zones and unique differences, you can basically apply the same technical analysis tools to stocks or forex.

Fundamental analysis differs more between the stock and forex markets, but both still rely on the principle of supply and demand. For example, the British pound GBP is one of the major currencies. When the British economy improves, the GBP becomes stronger. This might cause the Bank of England to raise interest rates, in an effort to control this growth.

Higher interest rates add value to assets controlled by GBP, which in turn raises demand for GBP—causing it to become even stronger. Currencies can even change value based on expectations, such as the dollar falling from month highs in anticipation of the Fed raising rates.

This gives a general sense of how fundamental analysis works in the forex market, and you can see how learning to read economic and political news is a crucial part of learning forex. Most forex strategies will recommend that you keep an eye on political and economic news in your targeted nations, but fundamental analysis helps you understand currency value on a deeper level.

These factors can be understood through world news, economic reports, the actions of central banks, and more.

These include unemployment numbers, housing statistics, and more. GDP tells you the total market value of all the goods and services a nation produced that year. While many see GDP as the broadest way to view an economy, it is also a lagging indicator, because it is only released once a year and thus does not give a snapshot of where an economy is in the current moment.

Before the final annual GDP is released, there are two reports: the advance report and the preliminary report. The reports are likely to stir up some volatility in the market, especially as they often offer different numbers. The industrial production report specifically shares changes in production of factories, utilities, and mines. Utility production can be more volatile as it is impacted by weather and other factors.

For example, after news about huge floods that devastated farms in China in November dropped, we saw a spike in the value of the USD over the CNH. The retail sales report, as the name suggests, measures total sales from all retail stores in the country. This is an excellent way to track consumer spending, and reports adjust for impacts of the seasons.

Retail sales reports are often more readily available with more recent data, so they are useful between releases of the GDP and other lagging indicators. The CPI will give you price changes of all consumer goods at a glance. Export prices can change pretty rapidly, so you need to keep a good eye on them. Every nation has a Central Bank. These institutions oversee monetary policy, set economic goals such as lowering inflation or raising employment levels, issue currency, regulate credit, manage reserves, and act as the bank of the government.

Speaking of central banks, interest rates can make a huge difference in exchange rates for currencies. Higher interest rates indicate optimism from the central bank, as they mean the economy is growing. If interest rates are being cut, that means the central bank is more skeptical.

Traders will often try to anticipate what a central bank is going to do. If there is news approaching of an announcement and traders think that interest rates will increase, they might start buying that currency to get a head start on the increase in value associated with these higher rates.

Others will take you by surprise, such as major weather events, or… a global pandemic? National economies have been impacted not only by the start of the pandemic back in March , but also news of developing vaccines, vaccine rollouts, the Delta variant, and more. Traders flocked to the Yen and Swiss Franc after news of a potential COVID variant resistant to vaccines, as these safe haven currencies often stand up more strongly to political turmoil.

Fundamental analysis helps you understand the building blocks of a currency and help you anticipate where it will go next. However, many traders use the forex markets more for short-term price fluctuations. This means that immediate news and technical analysis are often more helpful. Long-term positions are more common in the stock market than in forex, and fundamental analysis is a bit more useful for deciding what to do with your long-term positions.

However, fundamental analysis can give you a heads up on when a currency might be experiencing short-term volatility that you want to capitalize on. Reading an economic calendar and tracking upcoming reports will help you predict these windows and sneak on in to capitalize on a turbulent market. But how do you start putting this into practice?

First, make sure you have one of the top brokers for forex trading , which will automatically set you up with many of the tools you need. In particular, the following advice can get you started on tracking economic indicators and making better-informed trading decisions. Keeping an economic calendar handy on your desktop can help keep you informed of upcoming reports and indicators. There are many economic calendars available from a variety of websites.

by Tom Dec 12, Forex Blog. So Forex traders are left to guess what might happen next. Fundamental announcements, including employment figures, inflation estimates and other indicators of economic activity are released on a calendar schedule by various government agencies and industry associations — worldwide. Information about release dates can be found in various places on line, but one of the major sources is at Forexfactory.

So opening the Forex Factory calendar each day before you enter the market is an easy way to build some safety into your trading routine. Most readers understand about using the calendar, but for newcomers, this is a good time to go to the site and find it now.

Once the calendar is open, please note that in the upper left hand corner you can scroll back to see previous announcements. This is helpful if you want to observe the price action of an earlier jobs announcement, for example, in order to estimate what might happen next time that announcement occurs.

In addition, there are more subtle news releases to keep track of, as well. A fascinating example of this can be found with the New Zealand dollar. Check out the calendar section below. This screenshot is an example of using the filter to see only New Zealand events for the coming week.

Of course, the Gross Domestic Product GDP announcement upcoming on Wed 19 December will be important, and Forex Factory notes that with a red box.

But another piece of information that also typically yields a market price reaction is the GDT Price Index tentatively scheduled for 18 December. Although this is coded yellow, as less important, the New Zealand economy is heavily weighted toward agriculture and especially dairy products.

The GDT Price Index shows the result of the most recent dairy products auction. It indicates whether milk and cheese prices are moving up or down. Interestingly, this can have a big impact on the value of the Kiwi especially when other major Asian region issues are on the back burner.

If you click on the detail box of this announcement you can see more information about the release. Because of its volatility, we like to trade the New Zealand Dollar NZD , especially against the Australian dollar and the Great British Pound.

You must be nimble for these pairs! So be careful. But just to see the outcome of one or two of the dairy auction announcements, test your skill, go back through previous auction dates and compare them to the chart dates for NZD in your Metatrader charts. As the NZD is impacted by dairy prices, the Australian economy is very much tied to China as its major trading partner. NZD currency pair can quickly develop a major trend — or volatile price swings. Remember… Disciplined trading requires that you consider the potential for fundamental announcements.

Keep track of them. Fundamental Announcements by Tom Dec 12, Forex Blog. Search for:. Recent Posts Fabulous Fibonacci!! More Spooky Treats Trading Simply Spooky Automatically Update Kindle Content Using Indicator Alerts.

Categories Books on Kindle Forex Blog Metatrader Tips Technical Analysis Uncategorized. Join Our Fortune Hunting Team Subscribe to stay up-to-date with new content, announcements, special offers, and more.

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Economies are complicated. Join Our Fortune Hunting Team Subscribe to stay up-to-date with new content, announcements, special offers, and more. What indicators are news sources most interested in at what times? If you click on the detail box of this announcement you can see more information about the release. Recent Posts Fabulous Fibonacci!! Which Analysis Type is the Best for Forex Trading? So happy trading!

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