Fundamentals in Forex?

Good evening,

This is a serious thread, folks.
I am far from being a pro trader in regards to the Forex market (but 10 years of experience in stocks/futures) and not so long ago, when I glanced at fundamentals, I could find some ways to enter into a trade on a regular basis. I don't know why, and that's why I would like your seasoned opinion btw http://www.elitetrader.com/vb/images/smilies/smile.gif but it's been a few months that fundamentals are absolutely of no use.

I mean, I could take hundreds of examples but let's try with the following:

Yesterday, bad news from Switzerland (higher unemployment rate, seasonally-adjusted or not) and to top it off, better-than-expected news from Uncle Sam on the housing front... well ONCE AGAIN, the franc got on a crazy up ride in the afternoon.

It's JUST one exemple but on the majors, it's happened over and over again in the past few months, be it the yen, the franc, the pound or the euro. Can some Forex experts, pro or seasoned amateurs, explain me here (or in private) what's going on? How come fundamentals have been of no use lately?

What am I missing as an analyst?
I know, some are thinking: "wtf, trade the trend, you don't care as long as you are profitable, buddy"

Well, no actually, I like using my brain and usually it works out pretty well, what am I missing these days, that's why I would like the opinion of some fundamentally-oriented or technofundamentalists about all this.

Thanks very much in advance for your answers.
Private answers (if the thread becomes a mess) are welcome http://www.elitetrader.com/vb/images/smilies/smile.gif

Bless,

Let's go through an example, a simple one to get our brains started

Scenario: retail sales

Last month: -2.5%
Expected this month: -0.5%
Actual this month: -1.1%

OK, here's my question:

In your experience guys, what do you (or the big guys if you follow them) will see in this?

An improvement compared to last month's figures? Or quite the opposite, a figure lower than what the consensus expected?

Meaning, with this example, will you go long the eur/usd or short, from a fundamental standpoint? And thanks to your REAL experience as an analyst or/and trader in the Forex?

Please explain in details. Thanks very much in advance.

Good evening,

Before we even talk about fundies.... are you guys really aware of what macroeconomic analysis actually means?

I mean really... if you ask me, from an academic point of view I'll say when an economy is doing good the currency is suppose to go down really!

Take a look at the AD-AS diagram, when Central banks pursue exp policy let it be fiscal or monetary... or employment level goes up near to NAIRU (whatever) according to short term philips curve the inflation level is suppose to go up that means on the AD-AS diagram the GPL goes up and according to PPP that means domestic products are expensive compared to foreign products > Then it only means import will increase and supply of local currency will increase in FEM = Devaluation of local currency.

Really its that simple.... but if you simply follow these text book theories trust me you won't last more than a year at max. Why USD gained against Euro even though they are in resession? LoL I just explained it if you vice-versa what I just said.

PS: feels good to brag sometimes nevermind ;-)

Hi guys,

It looks like there is a huge majority of technical analysts in this forum http://www.elitetrader.com/vb/images/smilies/tongue.gif Anyways, here comes a scenario I would like you to work on:

Scenario: a BIG merger is announced, it hits the headlines all over the place, "a U.S company wants to buy an English one"

With your experience, is it a good call to buy the gbp/usd?
If so, what is usually the time frame? Upfront or it may take a few days to work out? Or is it just rubbish in your view?
Experienced traders/analysts are obviously welcome to participate

Thanks very much.
Bless,

tried to send you a pm but it wouldn't let me, are your settings set to receive pms?

Ahem sic, sorry sarchin... my bad...
Now you certainly can

Take care,

Good afternoon,

252 people read this thread... only TWO answers... I knew that TA was trendy but not that much http://www.elitetrader.com/vb/images...s/confused.gif

Well, if some seasoned traders/analysts are disappointed with the lack of attention this thread has drawn and they want to SERIOUSLY talk about fundamentals or techno-fundamentals in the Forex market, please don't hesitate to send me a private message or an E-mail. I mean, the CCY market is the only one I haven't made good money from and that's gonna change! http://www.elitetrader.com/vb/images/smilies/smile.gif

Likewise, if some of you know some forums/clubs with skilled fundamentalists I may discuss with, thanks a lot in advance.

For the rest of the "technical crowd", I won't annoy you any more, no worries. Good trading to all!

Bless,

i think forex fundemental analysis is complex and it is not easy like stocks or bonds. You take into account economy for both countries, correlation of certain pair against gold or oil, market sentiment, and fundamental works in long time frame rather shorter.