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Technical Fundamental Analysis Part2

This document discusses the importance of key economic indicators in fundamental analysis, specifically focusing on Gross Domestic Product (GDP), inflation, and interest rates. GDP is used to assess economic health, while inflation affects purchasing power and interest rates influence both the forex and stock markets. Understanding these indicators helps traders and investors make informed decisions based on economic conditions.

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ashermcdon
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11 views

Technical Fundamental Analysis Part2

This document discusses the importance of key economic indicators in fundamental analysis, specifically focusing on Gross Domestic Product (GDP), inflation, and interest rates. GDP is used to assess economic health, while inflation affects purchasing power and interest rates influence both the forex and stock markets. Understanding these indicators helps traders and investors make informed decisions based on economic conditions.

Uploaded by

ashermcdon
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Technical and Fundamental Analysis

Continuing from the introduction to technical and fundamental analysis, this section focuses on the

key economic indicators used in fundamental analysis and how they influence trading decisions.

Economic indicators provide traders and investors with insight into the overall health of the economy

and help forecast future movements.

Part 3: Economic Indicators

Gross Domestic Product (GDP)

GDP represents the total value of all goods and services produced over a specific period in a

country. It is one of the primary indicators used to gauge the health of an economy. A growing GDP

indicates a healthy, expanding economy, while a declining GDP suggests economic troubles.

Investors monitor GDP reports to make long-term decisions regarding stock markets, currencies,

and commodities.

[Insert GDP chart image here]

Inflation

Inflation measures the rate at which the general level of prices for goods and services is rising, and

subsequently, how purchasing power is falling. Central banks aim to control inflation by adjusting

interest rates. High inflation typically leads to interest rate hikes, which affect stock prices and the

value of currencies. Inflation data is closely followed by currency traders (forex).

[Insert Inflation chart image here]

Interest Rates
Interest rates are set by central banks and have a direct impact on the forex market and the stock

market. When interest rates rise, borrowing costs increase, which can slow down an economy, but

can also increase the value of the country's currency due to higher returns on investments. When

rates decrease, borrowing becomes cheaper, leading to potential economic expansion but a weaker

currency.

[Insert Interest Rates chart image here]

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