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Fundamental Analysis is the assessment of a business or a whole economy based on data pertaining to that business or economy. For an individual company this would include an analysis of the balance sheet, liabilities, assets, revenues, earnings, profits etc.

For a country’s economy, fundamental (or macroeconomic) analysis would look at and analyse many factors including; GDP, Employment, Inflation, interest rates, production as well as many other data points.

Traders can then use their analysis to derive a valuation about the true fundamental value for a security, asset, commodity or FX rate. The fundamental (or macroeconomic) analyst or trader can then compare this valuation with the current price (of the security, asset, commodity or FX rate) and then make a decision of whether it is overvalued or undervalued, then decide whether to sell or buy.

In this section we will look at fundamental and macroeconomic analysis in more detail. Furthermore, we will deliver articles aimed at developing the readers understanding and use of this this approach. Read more forex trading tips.


Intermediate

Sorry Soybeans Slump, Time to Seek a Bean Bounce

Posted on by Stephen Pope

Approximately 50% of U.S. soybeans were shipped to China in 2016 Trumps tariffs led to a retaliatory 25% levy being slapped on the U.S. crop The technical sentiment is as poor as it could be There is renewed whispers of further trade talks, so maybe a contrarian trade is in order In 2016 the leading … Continued

Intermediate

Dollar Loves Jobs Data; Not Thrilled

Posted on by Stephen Pope

Dollar was moved by the solid August jobs report Dollar driven by expectation of Fed action in September and December Trumps tariff tirade is still a cause for concern The short-term outlook for the Dollar Index to rally and test old resistance points The U.S. Dollar traded higher against other currencies on Friday, as better-than-expected … Continued

Intermediate

WTI Looks to the U.S. – Canada Trade

Posted on by Stephen Pope

Crude oil markets were unable to hold the high ground this week It has become bewitched by Dollar strength and U.S. – Canada trade talks Given 99% of Canada’s oil exports go to the U.S. … …The short-term outlook for oil is positive for a new test of $72/Barrel WTI crude oil broke through the … Continued

Intermediate

AUDUSD on Collision Course with Resistance

Posted on by Stephen Pope

Australia’s new PM is Scott Morrison as moderate Malcolm Turnbull is forced out The pair is pulled by commodity prices and Chinese trade Market trend is currently to head lower This can change on a break above 0.7400 The Politics Australia has a new Prime Minister (PM) after Scott Morrison mounted a late challenge during … Continued

Intermediate

NZDUSD and S&P500 Update

Posted on by Gregor Horvat

Hi traders, NZDUSD is slowly turning to the upside, suggesting that a higher degree wave 3 found its low and a new temporary three-wave correction is in play. As such we are observing current intra-day impulse as sub-wave a of 4 that can look for resistance and a temporary drop into sub-wave b near the … Continued

Intermediate

As the week closes, so WTI looks

Posted on by Stephen Pope

Crude oil markets were very volatile during the week It held crucial support levels on Friday Market considers the prospect of excess supply once sanctions on Iran set in The short-term outlook for oil is positive for a new test of $70/Barrel The market for WTI was given a reprieve after initially trying to rally … Continued

Intermediate

EURUSD, hunting for 1.1500

Posted on by Stephen Pope

EURUSD began the week in the ascendency reaching 1.1740 This broke down as the week drew on The EURUSD pair is riddled with bearish sentiment The short-term outlook for the EURUSD to break under 1.1500 this week The Euro staged an attempt to rally last week, however, it soon looked exhausted once it probed the … Continued

Intermediate

Gold Consolidation

Posted on by Stephen Pope

Bear action has undermined gold during Q2 A correction that started in April now appears to be easing so allowing gold some support US economic strength that has driven the Dollar will struggle to keep at 4%+ It looks like a period of consolidation is commencing Gold prices were unable to hold their early gains … Continued

Intermediate

A “no deal” Brexit Hurts EU

Posted on by Stephen Pope

Post Brexit, in 2016 the UK was caught without a plan No-Deal would be a dreadful outcome for both sides EU GDP will fall and over one million jobs will be lost An agreement on Euro clearing is essential Anything less leads to financial inefficiencies and risk Since the shock decision in the United Kingdom … Continued

Intermediate

Copper is a Dead Cat

Posted on by Stephen Pope

At the start of the year the outlook for copper was constructive That soon fizzled out as Trump trade tirade grew louder A corrective channel started in June, it has crashed through key averages Despite the potential of a small uptick, it will be a dead cat bounce Copper for July delivery ended at $2.751/lb, … Continued

Intermediate

Summer may be hot, but it’s gone cold

Posted on by Stephen Pope

US economic strength and an optimistic Fed are driving the Dollar Dollar exorbitant privilege is undermining gold A corrective channel started in April and appears to be taking hold Despite many global problems to drive risk aversion, gold is no longer a safe haven   In early May I wrote the gold prices were proving … Continued

Intermediate

Greece…Still Bankrupt

Posted on by Stephen Pope

The Greek economy has made minor improvements It will not really exit the bailout programme in August A weak government will dither over further reform It will, eventually seek yet another credit line Greece should be shunned in the capital markets Since the Greek economy was laid bare in 2010 successive administrations have preceded over … Continued

Intermediate

Oil Prices Driven by Thoughts of Excess Demand

Posted on by Stephen Pope

President Trump wants nations to stop importing oil from Iran This would impact global supply; Iran accounts for 5% of global production The impact of a successful ban on Iran and Venezuela etc would lift prices The outlook is bullish for WTI and targets $81/Barrel The oil price in the U.S. continued to make higher … Continued

Intermediate

Can Corn Keep Climbing?

Posted on by Stephen Pope

Commodities in the grain complex have moved higher China was ending penalties against imports of U.S. grains After the 30-minute measure, technicals all look highly positive Corn looks set to make steady gains, extending the recent run higher There was a new swagger in the step of grain futures at the end of the past … Continued

Intermediate

Oil prices suddenly look beautifully bullish

Posted on by Stephen Pope

Crude has spiked 19% this year, to prices unseen since late 2014 Iran produced 5.1% percent of the world’s total crude oil Focus in the oil market will remain on geopolitical tension in the Middle East After President Trump withdrew the U.S. from the Iranian nuclear agreement Prices are set to advance over the summer … Continued

Intermediate

Gold Frustrates Through April/May

Posted on by Stephen Pope

U.S. Dollar Index has made great upward strides The World Gold Council said gold demand has slumped The metal may be down, but it is not out. Prices are set to advance over the summer into Q3 On April 2nd I said in the note titled “Gold Still In Focus”: “…Rising interest rates will put … Continued

Intermediate

Cotton On

Posted on by Stephen Pope

Cotton prices have been steered by subsidies and tariffs in recent months The technical aspect is looking highly bullish The commodity sector is in general undervalued Grains and softs look to be in the sweet spot with cotton to target 95 Many factors can have an impact the price of cotton. These range from the … Continued

Intermediate

Look past Trump, the data will push

Posted on by Stephen Pope

Since April 5th, USDJPY moved above a downward sloping trend line On Friday, the price extended above the April high at 107.486 The price remains above the March high at 107.286 Look for a push to 108.000   USDJPY climbed to a 1-month high on Friday President Trump toned down his rhetoric on China and … Continued

Intermediate

Trade Tariffs Fuel Farm Fury & Crop

Posted on by Stephen Pope

U.S and China are set on a trade tariff collision course The mid-west states that supported Trump are feeling the heat Their appeals for a solution have so far been ignored They may be minded to express their ire in November’s mid-terms It feels like soybeans should be sold on strength It seems that President … Continued

Intermediate

Gold Still In Focus

Posted on by Stephen Pope

Gold and U.S debt levels are highly correlated The path of U.S. debt cannot go higher forever There may be a lag until Q3, however, I fully expect prices to shoot higher Following on from last week’s analysis paper on gold, I thought it useful to stay with this subject as one has to consider … Continued