FUNDAMENTAL AND TECHNICAL ANALYSIS OF FOREX

One of the dominant debates in the analysis of global financial market is the reliability of the two major analysis: Fundamental and technical.

In the foreign exchange market, several studies have concluded that fundamental analysis was more effective in trends in long-term (longer than a year), while technical analysis was more appropriate for shorter horizons (0-90 days). Combining the two approaches was suggested to be best suited for periods between three months and one year. Nevertheless, further evidence indicates that technical analysis of long-term trends helps
identify waves and longer-term fundamentals that trigger short-term developments. But most traders follow technical analysis because it did not require many hours of study. Technical analysts can follow many currencies at one time. Fundamental analysts, however, tend to specialize due to the overwhelming amount of data on the market. Analysis technique works well because the market tends to develop strong trends. Once the analysis technique is mastered, it can be applied with the same ease as much over time as a currency.

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