Fundamental analysis involves analysing economic and political factors that affect the value of a currency. These factors include central bank policies, economic indicators such as GDP, inflation, employment data, and political events such as elections and geopolitical tensions.

For instance, monitoring political events, such as elections and trade negotiations, may affect the value of a currency.

Technical analysis, on the other hand, involves studying past market data, such as price and volume, to identify patterns and trends that can help predict future price movements. Technical analysts use tools such as charts, indicators, and oscillators to help identify these patterns.

For instance, you can identify key levels of support and resistance and use them to determine entry and exit points for trades.

Sentiment analysis, also known as market psychology, looks at the market's overall mood and other traders' opinions and attitudes. This type of analysis can help traders understand how market participants feel about a particular currency pair, which can be useful in predicting future price movements.

For example, monitoring market volatility and using it as an indicator of market sentiment.

Each type of analysis has its strengths and weaknesses.

Fundamental analysis provides a long-term perspective on the market and can be useful for predicting major trends.

Technical analysis is useful for identifying short-term trading opportunities and can be useful for day trading.

Sentiment analysis provides insight into market psychology and can help traders understand how other market participants feel about a particular currency pair.

In the following sections, we'll explore each type of forex analysis in more detail.

But first, a questionnaire!

Forex Analysis