Let’s talk about how we use fundamental analysis for trading purposes and how it affects the market on a daily basis. Political, economical and social events and announcements are considered to be a part of the fundamental analysis. They play an important part in the strength or weakness of any said currency.

For example, in today’s economy with a recession still looming and many countries still suffering from the recession, we see a weakness in the USD. That weakness is due to a bad economy with no new job creation and Interest rates holding still while inflation rises. We see the USD value as a currency dropping against many of the other major currencies. However as the economy gets better, interest rates get higher to control inflation and as a result, the value of USD will begin to increase.

Basically this is what fundamental analysis is. As we continue writing this blog we will continue to reference this entry as a point of what we believe fundamental analysis to be.

Fundamentals:  We have a few announcements today which will affect the market.

Coming from United Kingdom we have the “Manufacturing PMI”. The previous announcement was 49.7 and the forecast for today is 50.3. (08:30  GMT).

Three  more announcement coming in from US “Unemployment Claims” which will be released at  12:30 GMT. The previous announcement was 530K and the forecast for today is 532K. we have the “ISM Manufacturing PMI”. The previous announcement was 52.9 and the forecast for today is 53.9. (14:00  GMT).At the same time we will have the “Pending Home Sales m/m” previous announcement was 3.2% and the forecast for today is 0.9%. Don’t miss the “Fed Chairman Bernanke Testifies” AT (13:00 GMT).