What Moves Forex:

What Moves Forex:

Currency market participants, economists and central bankers have been trying to answer the question about what factors drive exchange rates since national currencies come into being. Predicting exchange rates is more art than science; even analysts often have splitting views on the direction of currency prices.
There are basically two primary approaches of analyzing currency markets: fundamental analysis and technical analysis. Fundamental analysis is based on the underlying economic conditions, whereas technical analysis is about using historical price information to forecast future price actions. In recent years, more and more traders are switching to technical analysis, and they are mostly short-term traders. Medium to long-term traders tend to use more of fundamental analysis to predict future currency valuation.
It is not uncommon for the strongest technical signals to be thwarted by reactions to fundamental events. The reverse is also true in that prices may move according to technical patterns even when there are no major news released. Being a pure technical or fundamental trader would mean missing out half of the information, and being kept in the dark.