Economic Fundamental News to Look For
Before we determine the right strategy to deal with the release of economic fundamental news, what we need to do first is to determine what release of economic fundamentals can influence the price movements of the currency pair strongly.
The thing to keep in mind that when we are trading forex based on news of economic fundamentals this is because the news can increase the forex market volatility in the short term.So we will only do forex trading based on news of economic fundamentals that have great potential to be able to move the forex market.
The fundamental economic news that is the market driver and the most noticed by forex traders is fundamental economic news coming from the United States (US) even though at that time the market also reacted to the release of economic news from various countries.
Why is this possible because the United States (US) has a very strong economic influence in the world and the US Dollar is a currency reserve of all countries in the world. And almost 90% of transaction activities on the forex market use US dollars, this is what makes economic news from the United States (US) very important to be noticed every time it is released to the public.
The following are some summaries of the types of fundamental economic news from the United States (US) that are able to move the market (volatility) in units of pips.
In addition to reports on inflation data and decisions of the central bank, we must also pay attention to the geo-political conditions of the country such as wars, natural disasters, political unrest, and general elections, although this does not have a very large influence like other news, but it is worthy of attention.
We can also pay attention to stock market movements because sometimes the signal from the stock market signals a change in the huge forex market.
Now that we know the types of fundamental economic news that can drive the forex market, it’s time we determine what currency pair we will use for trading later.
Because news is able to increase market volatility, we need to choose highly liquid currency pairs so that the orders we open can be executed by the market. For example, are major currencies such as AUD / USD, USD / CHF, USD / CAD, USD / JPY, EUR / USD, and GBP / USD.
And because major currencies are highly liquid currency pairs, the spreads offered are also very competitive (low) given that when the market is very volatile due to the release of economic fundamentals, brokers usually increase their spreads.
Now, after we know what kind of fundamental economic news that can move the forex market as well as the type of currency pair, now is the time for us to learn what kind of strategy is right to be applied. So, don’t go anywhere, follow the lessons on how to trade forex based on the release of this economic news.