Fundamental Vs Technical Currency Analysis in Forex Trading

In the foreign exchange trading market, there are two types of analysis that are used as a base. There is fundamental analysis and technical currency analysis. These two analysis methods are used as the base calculation for an investment. A little bit different from stock market and any other markets, the use of the analysis in forex trading market is more focusing on currency, which connects with many different elements of a country and the economic and financial status.

Both of the analysis are widely used by many different people from also many different backgrounds. It mostly works depending on how effective which type of analysis is more effective to use in a certain situation or when finding out about the overall situation of a particular country. Many people are questioning whether it is a fundamental or technical analysis that is better to use.

Fundamental Analysis

This type of analysis is more focusing on the value of an investment and the application of the forex to compare with any particular country’s economic situation, which definitely also links to how it affects the currency of the particular country. Fundamental analysis is used mostly to analyze the economic report of a country, the government would release some of the important data of the country regarding the economy and how it would affect the currency as also mentioned above. This would enable the forex exchange investor to be able to predict in order to profit from the situation through the situation of the country.

There are some indicators that would be released to analyze fundamentally. Like the GDP or gross domestic product, this has what considered the number one measurement of the economy of a country. There is also industrial production, which you might have known that it describes the country’s factory production, mines, and some others. Also retail sales, which is a report to measure the receipts of the retail stores of the country. And the last one is CPI, which is the short of consumer price index, which contains a measurement of the change that happens to the price of consumer goods. And many other more.

Technical Currency Analysis

This type of analysis is more about predicting the movements of the future price of a country by examining the market data. It is more focusing on evaluating the history of the investment’s price so that the forex trader could get the overall comparison in order to buy, sell, or exchange with a fair price. A little bit different than the fundamental analysis, the technical currency analysis is more of the comparison of the economic and financial situation that is mostly based on statistics data like charts.

The technical currency analysis is also more focusing on studying the pattern of the country’s statistic, as it is concluded that by studying the pattern, the trader would be able to predict the currency more accurately. It is based on the country’s trends, the chart cycle, the strength of the country in the market, the momentum or the country’s progression, and some other indicators.


To compete whether which analysis is the better analysis method is pretty difficult. There is no proof of which method works the best in every situation in the forex trading market. It is in fact, depends on which situation and what kind of data you would want to use as an indicator to predict the currency and the success rate. Sometimes it is better to use some of both to get the best result and the best comparison in order to get the most accurate prediction. You should also consider many different factors like the effectivity of the analysis method and whether it would support you to get the profit from the investment.

Also, you need to take notes of some things regarding using both of the analysis methods. The most important thing is to do a proper, detailed research so that the method would be effective and resulting in an accurate prediction. You should also pay attention to the market expectation and try to not sway too easily over a news, it is the best to be careful and making sure that you always get informed.

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