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Fundamental analysis refers to the strategy of understanding the countries currency you are trading by looking at it's economic strengths, key indicators, GDP, and capital flows. Trade deficits and flows are also very important in fundamental analysis for Forex.
It is an alternative to technical analysis, which relies on charts to spot trends.
Most traders use either fundamental or technical analysis in trader, and the two camps argue as to which approach is best.
|Jennifer Mathes, Ph.D.|