Forex Fundamental Strategies

There are two main analyses that you need to consider before trade. Technical and fundamental analysis does much to provide a more educated guess than a simple coin toss but it is important to realize that each of these techniques will have a large failure rate. Thus, learn both of the technique and strike the balance for your investment.
Investors may base their investment decisions on fundamental strategies. Fundamental analysis investigate the intrinsic value of currency not by chart, but events, or news of pair currency. Some of the economic fundamentals that routinely affect foreign currency exchange rates are interest rates, inflation, trade balances, and government spending. There are also such non-economic factors, such as political events, world news, and market rumors that can determine the value of one currency against another. This study is generally more appropriate to the longer time frame.
Examples:

(observing economy in US)Housing Starts Rise – It shows growth in economy and increased credit demand, interest rate drop. Market Impact: Market price of foreign currency/USD : fall.

Gross National Product (GNP) fall - This figure reflects the growth and the economic situation of a country. If GNP falls, this reflects a slowing economy. Interest rate will decline. Market Impact: Market price of foreign currency /USD : rise.

Gross Domestic Product (GDP) fall- This refers to the sum of goods and services produced in a country, either by domestic or foreign companies. Market Impact: Market price of foreign

currency/USD : rise

Consumption spending Rise – Consumption is made possible by personal income and discretionary income. The power of purchasing is used as an important economic indicator. Market Impact: Market price of foreign currency/USD : fall

Government spending Rise – Government expenditures is influencial and holds impact to economy. For instance, expenditure on military play significant role for employment for the whole country. A cut off number of military increase unemployment and it causing rates to drop. Market Impact: Market price of foreign currency/US: rise.

Consumer Price Index (CPI) Rises - Reflects the trend of the average price of consumer goods. This figure is positively related to inflation and if the CPI rises this indicates rising inflation. Market Impact: a. Increase in gold prices. b. Market price of foreign currency/USD : fall.

Unemployment Rises – It is a lagging economic indicator. When economic contraction causes jobs to be cut.This indicates slow economic growth. Fed may ease credit, causing rates to drop. Market Impact: Market price of foreign currency/US: rise.