FX Market_7. Fundamental Instruments

Lesson 7: Fundamental Instruments

Fundamental analysis is not top down, but rather relies on economic figures like
interest rates, inflation and trade balance ratios.
The theory behind it states that markets could misprice a financial tool in the short
run, yet ultimately arrives at the right price.
During mispricing, there is a chance that a trading opportunity may show up.
This type of analysis hardly presents accurate points for entering or exiting trades,
but if used properly, it could be a huge help for predicting long-term price
movements.
The catch there, however, is that while countries appear similar to companies,
currencies are not exactly like shares. A business financial health is directly linked to
its stock price, while a currency's value is relevant to a range of factors such as
monetary policies, economic indicators,technological innovations, worldwide
progress, and natural calamities.