Fundamental analysis is the art of identifying what drives an asset's fair value and whether the current price reflects it. In forex, fundamentals are primarily macroeconomic.
INTEREST RATE DIFFERENTIALS: Money flows toward higher yields. A country raising rates while others hold tends to see its currency strengthen, as global capital reallocates.
ECONOMIC GROWTH: GDP, employment and PMI data shape expectations for central bank policy. Strong growth raises the probability of rate hikes; weakness raises the probability of cuts.
USING FUNDAMENTALS WITH TECHNICALS: Fundamentals answer "which direction" — technicals answer "when" and "where". Combining both gives you a higher-probability framework.
