Fundamental analysis in Forex involves evaluating the economic, political, and social factors that influence the value of a currency. The goal is to understand the underlying forces that drive currency prices, helping traders predict long-term market trends. This type of analysis focuses on key economic indicators, central bank policies, and geopolitical events. Key components of fundamental analysis in Forex include: 1. Interest Rates: Central banks’ interest rate decisions (e.g., the Federal Reserve or ECB) are crucial because higher rates tend to attract foreign investment, strengthening a currency. 2. Economic Data: Reports like GDP growth, unemployment rates, inflation (CPI), and trade balances provide insights into a country’s economic health and can influence currency strength. 3. Political Stability: Political events (elections, government policies, etc.) can affect investor confidence and, consequently, the value of a currency. 4. Global Events: Natural disasters, trade wars, and geopolitical tensions can lead to sharp movements in currency prices due to changes in investor sentiment. Traders use fundamental analysis to identify long-term trends or market imbalances, making it a key strategy for those who want to understand the “big picture” behind currency price movements. It’s often combined with technical analysis for more precise trading decisions. #firstdealofthenewyearFateema