One of the most traded currency pair today is EUR/USD. The economic news affects Euro and Dollar on a regular basis and in most cases the impact is strong enough to generate great chunks of profit. Forex fundamental analysis focuses on examining economic condition and latest news of the countries related to the currency pair you have selected to trade. The analyzed data involves:
With a set of news release and statements provided by politicians, economists and the major payers in forex industry, the market reacts and moves accordingly based on the impact of the news.
In order to follow economic releases closely, traders use daily economic calendar in order to predict nearest market direction. There are set of previous data alongside with forecasts for the nearest numbers.
While traders wait for the actual data to come out, the market may act volatile especially of there is a noticeable difference between the forecast and the actual data.
What effects Euro and US Dollar the most?
Certain economic data influences Euro in particular and forces the market to make sudden up or down moves. Depending on your trading style, you have to decide whether to take advantage of the market high volatile behavior, or stay out of it until the market gets a chance to stabilize a little.
Economic data forcing Euro to go crazy is:
German IFO Survey
This is a calculation of the confidence of German businesses. Published monthly, this event influences EUR/USD in a big way.
Retail Sales Figures
Monthly reports of sales figures of all the retail outlets. This shows the amount of private consumption. EUR/USD currency pair is influenced quite highly by this data.
Consumer Price Index
Here is another economic data you shouldn’t miss. The index shows the chance in prices for a predetermined set of goods and services. This information is published monthly and highly effects EUR/USD pair.
Gross Domestic Product (GDP)
Watch out for GDP data, because it shows the worth of all finished goods and services in Euro Zone. Monthly published, this piece of economic data has a moderate impact our pair.
Published monthly, unemployment data for Euro Zone is the percentage of the unemployed workforce. These numbers make EUR/USD pair shake and shimmy, which consequently creates volatility and major profits for the brave traders whose trading style allows them to trade news.