Forex EUR/USD – What are the Fundamentals that influence this pair?

3 Comments

1. Jason - says:

   December 31, 2009 at 18:49

   Here are some of the fundamental economic reports that will influence the EUR/USD:

   For the USD:
   - Non-Farm Payrolls
   - FOMC interest rate decision
   - Retail Sales
   - CPI (Consumer Price Index)
   - GDP
   - US Trade Balance

   For the EUR
   - Purchasing Managers Index Manufacturing
   - Purchasing Managers Index Services
   - Retail Trade
   - German Retail Sales
   - Eurozone Gross Domestic Product
   - Unemployment data (Germany and Eurozone)
   - Consumer Price Index
   - German ZEW Survey
   - German IFO Survey

   You can keep track of the weekly economic releases on the DailyFX calendar here http://www.dailyfx.com/calendar .

   Traders are concerned with the overall health of the economy that they are trading. The better the health of the economy, generally the stronger the currency will get relative to weaker currencies. Which is why you are watching growth reports such as GDP, manufacturing, production, etc.

   Second, trade flows and capital flows into a currency will strengthen that currency which is why it is important to watch interest rates (higher interest rates attract capital causing the currency to strengthen) and trade balance numbers.

   To put all the pieces together, I would recommend going through the video course here http://forexforums.dailyfx.com/free-video-forex-trading-course/ . It has a wealth of knowledge to get you started.
2. Forex - says:

   December 31, 2009 at 18:49

   market sentiment can move market. US economic dire. US central bank printing money. We are expecting US dollar to weaken and EUR currency to rally. This sentiment will continue to do so till there are new fundamental news coming to change the market sentiment.

   Last year is subprime, housing data was largely watched.

   For me trading EURUSD is to grab the major trend move. Now is Upward, so just focus on the right level to enter to buy.
3. InsideFX - says:

   December 31, 2009 at 18:49

   Forex trading is purely SUPPLY and DEMAND.

   From a textbook perspective, any fundamental factors that would increase the demand of a currency while holding the demand of the other currency in the pair non-changing, the fundamental factor is considered to have positive influence on the currency against the other.

   Example, country that reports high ECONOMIC GROWTH will have increased in demand for its currency since foreign investors need to convert to the country’s local currency before they could invest in the country’s assets.

   Similarly, a country with high INFLATION RATE will have a decreased in demand for its currency due to depreciated return for any foreign investors from their investment in the country’s assets after accounting for the negative effect of inflation.

   Increased in RETAIL SALES leads to higher ECONOMIC GROWTH. Hence, this will in turn lead to higher demand for the country’s currency. So an increase in retail sales will have positive influence on a currency.

   However, analyze a trade opportunity using this method may prove futile for any part time Forex traders. Unless, you build a program to crunch all these economic data and interpret their complex relationships, attempt to profit from fundamental news analysis may be too difficult for any part time Forex traders.

   If you have watched Forex market during economic news release, you may be baffled by why certain economic news have the exact opposite effect to what it should be. This is because fundamentals and currency pair do not have simple linear relationship. There are many complex underlying factors in play that we may not account for in our analysis. This explains it, when Australian employment number came out earlier today ( Sept 09, 2009) -15k better than expected of -27.1k, yet AUD/USD still fell from 0.8615 to 0.8583 in spite of the better economic number

   I suggest you read Steve Nison’s Japanese Candlestick Charting Techniques. I believe it will help you look at Forex trading from a different perspective.

   I was a fundamental trader for years before I started to employ candlestick studies in my analysis. Check this blog that I wrote on this subject.

   http://mytradepage.com/blogs/10/First-Blog-Post—Experience-of-a-FX-Trader.html

   Good luck trading!