Fundamental and Macroeconomic Analysis

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 approach. Read more of our forex education articles here.


Supply Chains: Global to Local

Since the 1960’s supply chains have gone global Cost control and profitability were key drivers Coronavirus has crashed the global economy There is a new drive to build local chains In the traditional teaching of economic theory, the argument suggests that global GDP will increase when the principle of comparative advantage [1] is applied by … Continued


Top 10 Trading and Investing Books

Education, education, education! There are two key aspects too improving yourself in any given venture, whether in sport, in business, in your personal life and certainly when it comes to trading and investing. And the first is educating yourself in whatever you are trying to achieve. The second is to then practice all that you … Continued


Top 10 Trading Movies

Financial markets have always been dramatic, full of fear and greed, disaster and redemption, tragedy and comedy, creativity and stupidity! And this makes for great cinema and has attracted Hollywood over the years. Many movies portray the individual the market participants, the traders, in a somewhat negative way, the villains of the film, with incredible … Continued


Top Ten Valued Sports Teams

Why the explosion in the valuation of sports teams? Sports are extremely popular, being a draw to billions of people around the world, acting not only as entertainment but also as social events for many people. Over the past 2-3 decades there has been a surge of investment entering sports, mainly due to technological advances, … Continued


The History of the Pound

In this article we are going to look at the British Pound, the world’s oldest, still used currency. We will explore the Pound in a historical context, looking at its roots in the Forex market, we will follow the Pound into the modern era and on into the recent Brexit saga. We will also look … Continued


Solving the Banking crisis is critical for global economic fortunes

OECD has a gloomy economic outlook for 2019 and 2020 The only inflation is in financial assets It is time to put all banks through a series of radical stress tests and let the weak fail The required reforms do not include nationalising the banking system The Organisation for Economic Cooperation and Development (OECD) recently … Continued


Top Ten Economic Data Points from the US

Here at FX Explained we have looked at the importance of macroeconomic data on domestic economies in our educational video and article Fundamental Analysis, in our Master Academy series. This “big picture” data can provide an insight into the overall state of a domestic economy and assists traders and investors in their decision making processes … Continued


Central bankers have the whole world in their hands

The world economy is slowing President Trump is driving a trade war The Eurozone is suffering from fading growth and confidence The writing is on the wall as far as the yield curve is concerned Be in no doubt, the world’s financial markets are in a funk as bond yields race to a bottom that … Continued


Stock Market Indices

In this Master Academy educational video and article, we are looking at Stock Market Indices. In this article we will look at: What is a Stock Market Index? What are the types of Indices? How are they calculated? Stock Market Index Examples What is a Stock Market Index? A Stock Market Index is a weighted … Continued


Fundamental vs. Technical Analysis

In this Master Academy educational video and article, we are looking at the basics of the different approaches to analysing financial markets that come under the titles Fundamental Analysis and Technical Analysis. Fundamental Analysis There are FOUR subcategories that come under the banner of Fundamental Analysis: Macroeconomic Data Analysis Microeconomic Analysis and Corporate Data Central … Continued


What are the FAANG Stocks?

The upgraded acronym FAANG is a development of the original acronym, FANG, which was proposed by Jim Cramer on CNBC back in 2013. FAANG stands for: Facebook (FB) Amazon (AMZN) Apple (AAPL) Netflix (NFLX) and Alphabet (GOOG) (parent company of Google) These are five of the most popular and strongly performing technology shares in the … Continued


Trading Terms

In this video and complementary article, we are looking at some basic trading term used in financial markets trading. Buy and Sell Long and Short Bull and Bear/ Bullish and Bearish Risk On and Risk Off Buy and Sell/ Long and Short As a trader, if we think a market or asset is going to … Continued


Asset Classes

In this article and accompanying video we are looking at the different asset classes that investors and traders can invest in and trade. The four main asset classes we are going to look at are: Equities, stocks, shares (including indices, or averages) Bonds (Government and Corporate) Commodities Foreign Exchange (Forex, FX and currencies) Equities, stocks, … Continued


Hawk / Dove Sheet

Here we present the Hawk / Dove sheet, an explanation of the terminology as well as the implications on forex trading and how it is used in fundamental analysis. Hawkish and Dovish Hawkish A Hawk is a term originally used in economics to describe economists or Central Bankers who are more concerned with potential recession … Continued


Sovereign Rating Sheet

A credit rating is the assessment of the credit risk of a potential borrower or debtor. Primarily this focuses on the capacity to make repayment of the debt, and therefore implicitly a prediction of the probability or possibility of the debtor not repaying (or defaulting). Sovereign Debt Ratings are a form of credit rating, but … Continued