What is Fundamental Analysis?

Fundamental analysis is a method that attempts to predict the intrinsic value of an investment. It is based on the theory that the market price of an asset tends to move towards its 'real value' or 'intrinsic value'.

Fundamental analysis in Forex entails predicting the price valuation of a currency and its market trends by analyzing current economic conditions, government policy and societal factors within a business cycle framework. Forex Traders gauge a country's economic state by examining macroeconomic indicators covering:

  • Interest Rates Announcement
  • Gross Domestic Product (GDP)
  • Consumer Price Index (Inflation) and Spending Indicators
  • Employment Indicators
  • Retail Trade and Consumer Confidence
  • Balance of Trade Surplus or Deficit
  • Government Fiscal and Monetary Policy

Visit our economic indicators page and learn more about the different indicators and their impacts on the markets.

Fundamental Analysis Benefits

Determining the intrinsic value of an investment

Identifying long-term investment opportunities

Fundamental Analysis Drawbacks

Too many macroeconomic indicators and indicator can confuse novice investors

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HIGH RISK INVESTMENT WARNING: Trading Foreign Exchange (Forex) and Contracts for Differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin. Please click here to read full risk warning. Markets.com Vietnam is operated by HighMoon International Inc., a Belize limited liability company licensed by the International Financial Services Commission (IFSC) with license no. IFSC/60/298/TS/14 whose registered office is at No.35 New Road, P.O. Box 1708, Belize City, Belize, C.A.

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HIGH RISK INVESTMENT WARNING: Trading Foreign Exchange (Forex) and Contracts for Differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin. Please click here to read full risk warning. Markets.com is operated by Coverdeal Holdings Limited, a Financial Services Company authorized and regulated by the Cyprus Securities Exchange Commission (CySEC) under license number 231/14. Coverdeal Holdings Limited is located at Sea Breeze Court, Block 10, Megalou Alexandrou 1-204, Pyrgos 4534, Limassol, Cyprus

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HIGH RISK INVESTMENT WARNING: Trading Foreign Exchange (Forex) and Contracts for Differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin. Please click here to read full risk warning. Markets.com is operated by Principia Financial Group Inc, ( license no. 155-2014). Principia Financial Group Inc is located at Ocean Business Plaza, Oficina 1601, Piso 16, Av. Aquilino De Law Guardia, Marbella, Ciudad de Panama, Republica de Panama

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