Imagine the Forex market as a giant, moody beast—it reacts to news like interest rates, wars, and even tweets! Fundamental analysis (FA) is your toolkit to predict its moves by understanding the “why” behind price swings. In this guide, you’ll learn to trade like a news-savvy pro. Let’s decode the headlines!

Why Fundamental Analysis Matters

While technical analysis focuses on *what* is happening, FA explains *why* it’s happening. Think of FA as the “big picture” lens: interest rates, GDP reports, and geopolitics shape currency values. Master FA, and you’ll trade ahead of the crowd!

Key Economic Indicators That Move Forex

1. Interest Rates: The Market’s Pulse

Why It Matters: Central banks (like the Fed or ECB) adjust rates to control inflation. Higher rates = stronger currency (usually).

Example: If the Fed hikes rates, USD often rises as investors seek higher yields.

2. GDP (Gross Domestic Product)

Why It Matters: GDP measures a country’s economic health. Rising GDP = strong economy = stronger currency.

Pro Tip: Compare actual vs. forecasted GDP.

3. Inflation Data (CPI & PPI)

Why It Matters: High inflation = central banks may hike rates.

Watch For: Consumer Price Index (CPI) and Producer Price Index (PPI).

4. Employment Reports (NFP, Unemployment Rate)

Why It Matters: Strong jobs data = healthy economy.

Biggie: U.S. Non-Farm Payrolls (NFP) on the first Friday of every month.

5. Geopolitical Events

Why It Matters: Wars, elections, and trade deals create volatility.

Example: Brexit sent GBP crashing in 2016.

How to Trade the News

1. Pre-News Prep: Check the economic calendar (Deriv has one!).
2. During the News: Expect volatility! Use limit orders to avoid slippage.
3. Post-News: Let the dust settle before jumping in.

Interactive Section: News Trading Quiz!

Think you've got the FA edge? Let's test your news IQ!

What’s Next?

Now that you're a news-trading maestro, let's perfect your timing!