#firstdealofthenewyearAKEEL Forex traders use technical and fundamental analysis to make trading decisions. Both approaches have unique advantages and can be combined for a stronger strategy. 1. Technical Analysis (TA) Definition: Technical analysis focuses on price action, historical data, and chart patterns to predict future price movements. Key Technical Tools Charts & Candlestick Patterns: Identify market sentiment (e.g., Doji, Engulfing, Head & Shoulders). Indicators: Moving Averages (MA): Identifies trends. Relative Strength Index (RSI): Measures overbought/oversold levels. MACD (Moving Average Convergence Divergence): Confirms trends. Bollinger Bands: Shows volatility. Support & Resistance Levels: Key price zones where reversals or breakouts may happen. Trend Lines & Fibonacci Retracement: Helps identify potential reversal points. Pros of Technical Analysis ✔ Works well for short-term trading. ✔ Easy to apply with trading software. ✔ Helps in identifying precise entry & exit points. Cons of Technical Analysis ✘ May not account for major economic events. ✘ False signals in choppy markets. 2. Fundamental Analysis (FA) Definition: Fundamental analysis focuses on economic, political, and financial factors that affect currency value. Key Fundamental Factors Interest Rates: Higher rates attract investors (e.g., USD strengthens if the Fed hikes rates). Economic Data: GDP growth (higher GDP = stronger currency). Inflation reports (CPI, PPI). Employment data (NFP in the U.S.). Central Bank Policies: Federal Reserve (USD), ECB (EUR), BoJ ( #firstdealofthenewyearAKEEL