📚 The Beauty of Combining Technical & Fundamental Analysis 📚 What is Fundamental Analysis?
Fundamental analysis is a way of looking at the forex market by analysing economic, social, and political forces that may affect currency prices. The idea behind this type of analysis is that if a country's current or future economic outlook is good, its currency should strengthen (Baby Pips - www.babypips.com)
What is Technical Analysis?
Technical analysis is the study of historical price action in order to identify patterns and determine probabilities of future movements in the market through the use of technical studies, indicators, and other analysis tools (Forex.com www.forex.com)
Technical analysts look for similar patterns that have formed in the past and will form trade ideas believing that price could possibly act the same way that it did before.
From the chart above, you can see how key fundamental news created incredible volatility in the market but the underlying technical analysis was still intact. From this, we can gather that although fundamental analysis is important, technical analysis is just as important.
See charts below to identify how we could have traded the key fundamental moments over the past few years.
See links below for more trade ideas and in-depth analysis!
Babypips
Study Notes - The Bullish PennantStudy notes based on the Babypips course.
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Bullish pennants are formed in an uptrend and imply that the bulls are about to charge again!
- Uptrend
- Breather, consolidation into a tight range
- Breakout to the upside
Flagpole can be used to measure size of the breakout upside potential
