Traders in the forex market rely on fundamental analysis and technical analysis. Tech🍨nical analysis in forex tells traders that the ๊price and charts reflect the news.

Fundamental analysis determines the 澳洲幸运5官方开奖结果体彩网:intrinsic value of an investment to determine its value, rather than historical price action or market sentiment. Forex traders look at the economic conditions that affect the 澳洲幸运5官方开奖结果体彩网:valuation of a nation's currency. There are many economic indicators and private reports that can be used to 澳洲幸运5官方开奖结果体彩网:evaluate forex fundamentals.

What Are Economic Indicators?

Economic indicators track a country's economic performance. Reports are released at scheduled times by a government or private organization that detail and measure different aspects of a country's economic health. 

The effects of an economic release on the forex market are comparable to how earnings reports and SEC filings affect stocks. In forex, as in the equities market, any deviation from the norm can cause large price and volume movements.

Gross Domestic Product (GDP)

A country's GDP is considered the broadest measure of its economy and represents the total 澳洲幸运5官方开奖结果体彩网:market value of all goods and services produced in a count🐠ry during a given year.

The GDP figure is often considered a 澳洲幸运5官方开奖结果体彩网:lagging indicator, and most traders focus on the two reports that are issued in the months before the final GDP figures: the advance report and the preliminary report. Significant revisions between these reports can cause considerable volatility. The GDP is analogous to the revenue of a publicly traded company in that they bot🍸h measure internal growth.

Retail Sales

The 澳洲幸运5官方开奖结果体彩网:retail sales report measures the total receipts of all retail stores in a given country. In the U.S., this data is compiled monthly by the Department of Commerce. The report is particularly useful as a timely indicator of broad 澳洲幸运5官方开奖结果体彩网:consumer spending patterns and is adjusted for seꦺasonal variables.

It can be used to predict the perfo𓃲rmance of more important lagging indicators and to assess the iওmmediate direction of an economy. Revisions to advanced reports of retail sales can cause significant volatility.

Industrial Production

Compiled and released monthly by the Federal Reserve Bank of St. Louis in the U.S., this report shows a change in production levels of factories, mines, and utilities. It also reports "澳洲幸运5官方开奖结果体彩网:capacity utilization," the degree to which each factory's capacity is being used.

Traders using this indicator often pay close attention to utility production, as utilities are closely intertwined with energy costs, which in turn depend on the weather. Unexpected weather events c😼an result in significant revisions in 🃏upcoming reports and cause volatility in the nation’s currency.

Consumer Price Index (CPI)

The monthly CPI measures changes in the prices of 澳洲幸运5官方开奖结果体彩网:consumer goods across 200 different categories. It is the most widely used measure of 澳洲幸运5官方开奖结果体彩网:inflation and is closely followed by not only forex traders, but also by policymakers, businesses, and consum🃏ers.

CPI readings are compiled in the United States by the Bureau of Labor Statistics and affect forex and broader financial markets, as it is one of the key metrics 澳洲幸运5官方开奖结果体彩网:central banks consider when deciding on 澳洲幸运5官方开奖结果体彩网:interest rates.

Using Economic Indicators

Since 澳洲幸运5官方开奖结果体彩网:economic indicators gauge a country's economic state, changes in the conditions reported directly affect the price and volume of a country's currency. Additionally, third-party reports and technical factors can drastically affect a currency's valuation. Traders who conduct 澳洲幸运5官方开奖结果体彩网:fundamental analysis in the forex market may follow these tips:

• Keep an 澳洲幸运5官方开奖结果体彩网:economic calendar that lists major economic indicators and when they are released.
• Watch 澳洲幸运5官方开奖结果体彩网:future forecasts as markets move in anticipation of an upcoming report. 
• Be informed which indicators capture most of the market's attention. Such indicators are 澳洲幸运5官方开奖结果体彩网:catalysts for the largest price and volume movements. For example, when inflation is high, the CPI is one of the most watched indicators.
• Know the market expectations for the data, and then pay attention to whether the expectations are met.
• Don't overreact. Often numbers are released and then revised, and things can change quickly.
• Pay attention to data revisions, as they may be a useful tool for seeing trends and reacting accurately to future reports.

The Bottom Line

Many economic indicators help traders evaluate forex fundamentals. Investors must look at the numbers but also understand what they mean and how they affect a nation's economy. When properly used, these indicators can be an invaluable resource for any currency trader.