How to Read the Influence of ForexFactory Economic Data
While filling out one of the forex training classes in one of the cities in Indonesia, participants asked questions about the ‘unusual’ movement and deviated from the technical analysis that he did. Technically, the price has a tendency to fall but it turns out the price even rose significantly. What changed it all of a sudden? We answer with questions anyway. Are there any economic data released at that time?
We see events and questions often appear for newbie traders, as most of them go directly to forex just by looking at the graph as their decision tool. Whereas to jump into this forex business, it takes a thorough learning. Includes fundamental analysis derived from economic data and events in the world that can affect price movements.
This article will provide a brief explanation of how to read the influence of economic data released. There are many references to see the world economic data released such as Reuters, Bloomberg, TradingEconomics and others. But as a rule of thumb, we use economic data at ForexFactory.
We use a light approach because if given the details, newbie traders will run away. Analyzing economic and fundamental data is not difficult. There are two ways, namely, comparing actual forecast data and reading the title of related articles currency.
Comparing Forecast and Actual
Reading the effect of economic data released on ForexFactory.com can by comparing the two numbers. Forecast data is the result of consensus from analysts and economists. This data is collected through a survey and made averaged. Institutions that often conduct surveys to get consensus are Reuters, Bloomberg and others. Most likely the data in Forexfactory is taken from various sources.
Please see screenshot image. You can get forecast and actual columns. If you want to like what the effect, click the picture folder and then will open a description of the data. See ‘Usual Effect’. This is the influence of the data associated with the currency in question. If the release of UK data, it will have a major effect to the pair GBPUSD. However, if the release of US data, it will affect global to USD-related pairs.
It can also be compared with previously released data, whether there is a revision (up / down) and if there is a difference or the difference is too far can also affect the sentiment of price movements.
Well, from now on you do not need to be surprised if there are significant changes in the price graph when there is a release of economic data