Basic analysis is mainly a method of analyzing economic, social, political, and other factors that affect market supply and demand relationships. Investors who rely on fundamental analysis must identify various factors that can affect the economy, What factors will cause rapid economic development, Or what factors are causing the economy to slump.

The foundation of this analytical method is, When a country's current economic prospects are good, Their currency should be strong. The reason is that the better the economic situation of a country, the better it is, More and more foreign companies and investors will be willing to invest here, Therefore, they need to purchase a large amount of the country's currency, To acquire related assets.

For example, say, The economy of the United States has been continuously improving, As the economy continues to improve, It can also be achieved by increasing interest rates, To control the rapid growth of the economy and inflation. Higher interest rates will make dollar denominated assets more attractive, Many funds hoping to earn high US dollar interest rates may flow into the United States, The value of the US dollar will increase.

There are many benefits to trading based on fundamental analysis, The most crucial thing is a currency pair, Or changes in a country's economic situation or corporate profits, It is the core factor in determining the medium to long term direction of the currency or stock index.

When you have sufficient knowledge of a region (Or a stock index company) When it comes to the industry and economic trends, Investors can also choose to hold relevant currency pairs or stock indices for the long term, And there is no need to stare at the disk for a long time to operate, At the same time, one can also wait until the relevant currency pairs or stock indexes experience a pullback or rebound, Gradually go long or short when entering the market.

Various fundamental changes can have an impact on currency pairs, The expected trend of interest rates has the greatest impact on the strength of a country's currency, Investors can trade based on this.

Assuming that a country's inflation data consistently exceeds the central bank's target, The central bank will influence the domestic currency based on its own inflation target, Adjusting by raising and lowering interest rates.

Usually, the central bank will raise interest rates, Reduce the amount of currency in circulation to curb inflation; If the central bank wants to increase the supply of circulating money, Then lowering the interest rate is enough, Usually, currencies of countries with higher interest rates tend to experience an expected increase in interest rate differentials compared to currencies with lower interest rates, Market hot money will be more willing to flow into the high interest money market, Therefore, the demand for currency has increased, One of the reasons for the medium to long term rise in exchange rates, Investors can take advantage of these opportunities to invest.

Fundamental analysis focuses on the driving factors of market volatility, By analyzing the macroeconomic situation of the country, To predict basic trends and exchange rate changes. under normal conditions, When a country's economy strengthens, its currency exchange rate will rise, When the economy is in a downturn, The currency exchange rate will decrease.

Due to the fact that the US dollar is the world's trade and settlement currency, In the foreign exchange market, The US dollar holds an absolute dominant position and advantage. The economic situation in the United States, It is the main force affecting the foreign exchange market. As a result, its economic data has become the focus of most attention for foreign exchange investors.

The impact of different economic data on the market, According to statistical analysis, the order from strong to weak is as follows: Interest rate resolution, Unemployment data, gross domestic product, industrial production , foreign trade, Inflation rate, Producer Price Index, Consumer Price Index, Wholesale Price Index, Retail Price Index, Purchasing Managers' Index, Consumer Confidence Index, Business Prosperity Index, Building data, Factory orders, personal income, car sales , average wage, Commercial inventory, Leading index, etc.

Of course, in different market situations, The impact of data will change. For example, when a certain economic data deviates significantly from the expected value, Its impact on the market will be amplified; For example, before the change in monetary easing policy, Employment data, Inflation and other data will be given more attention; For example, for important economic events, Official statements during the period, Political speeches, etc, All of them will have a significant impact on the market.

 In actual transactions, Investors do not need and cannot analyze all the data one by one, But to grasp the changes in market focus at that time, And the market's response to the focus. of course, For a successful investor, It is necessary to make predictions and judgments before releasing indicators and data, And before and after the data is released, What trading strategy should be adopted.

Investors rely not only on technical analysis, but also on, Fundamental analysis also has a significant impact on the trend of exchange rates, and Mitrade The provided financial calendar will effectively assist clients in finding opportunities from fundamentals.

for example, If you wish to trade USD/JPY (USD/JPY) , So do you want to pay more attention to events and data in the United States and Japan before trading, And I only want to see the data for the next two weeks, To analyze warehouse building strategies, At this point, you can use the financial calendar to filter out relevant data, And make your own analysis.

Price fluctuations, In theory, it should have fully reflected all the effective information in the market. Unfortunately, For us investors, It's not that simple. The market cannot simply and directly reflect all information, Because of the actions of investors placing orders, It's impossible for everyone to be the same, So sometimes we need to measure market sentiment, Through various trading data provided by traders and third-party market analysis institutions, Ratio of long and short positions, etc, We can effectively determine whether the current market sentiment is optimistic or pessimistic, This is very effective for analyzing trading trends.