Analyzing Movements In The Forex Market

Analyzing Move ments In The Fore x Mark et By Donald SaundersMovements in the Forex market are based upon the simple law of supply and demand. When there is a demand for a particular currency its price will rise and when there is an excessive supply of a currency its price will fall. Despite this seemingly simple principle, predicting movements in foreign exchange prices is not at all easy.Today there are two main methods used to predict movements in the Forex market - fundamental analysis, which dominated the Forex market until the mid 1980s, and technical analysis, which has become increasingly popular in recent years with the arrival of new technology providing the necessary analytical tools.Fundamental AnalysisTraders who base their predictions on fundamental analysis focus their attention on the economic, political and social factors which drive supply and demand. Their analysis is based upon such things as interest rates, inflation, unemployment and economic growth rates .