Forex Fundamental Analysis: 9/7/2013

Filed under: Learn Forex Trading |

Screen shot 2013-07-08 at 09.51.11I have decided to spend some time doing some forex fundamentals analysis over the next few weeks, as fundamentals are not normally something that I really look at or consider during my forex trading. I am primarily a technical trader, but I do not discount that there is something to be gained from fundamental analysis. While fundamental news is probably all contained within the charts before you can even read about it, fundamental analysis could help with forming a bigger picture of the forex markets. So with this in mind, what happened in the forex markets last week?

 

The EUR/USD pair fell due to traders worrying about negative interest rates from the ECB, and US jobs data pointed to a stronger than expected economic recovery. In fact, the US gained on most of the other major currencies due to better than expected resulted in the US non-farm payroll, which was expected to rise by 165,000 jobs, but in fact rose by 195,000 for the second straight month, after a rise of 175,000 in May. This suggests that the economic recovery in the US is well on the way now, with payrolls increasing by an average of 179,000 per month in 2011 and 2012, and with this figure seemingly proliferating rather than diminishing. Moreover, the US Dollar Index climbed to it highest since 2010; so all signs points to strength in the US dollar.

 

While such data might not be of much use to short term traders such as myself, who hold positions for an average of a few days or a couple of weeks at the most, it does give you an idea of the bigger picture of the forex markets, and such fundamentals could be of great use to those traders who intend to hold positions for a longer period of time. Therefore, I will continue looking at some fundamental news over the coming weeks and months, and see if it can be incorporated into a short-term price action trading strategy.

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