2022-12-26 13:29

Forex fundamental analysis

In fundamental analysis the most important economic news and data and its impact on the forex market and other markets, is reviewed and analyzed.
Forex fundamental analysis Forex fundamental analysis
In this fundamental analysis, the most important events, news, and economic data for important currencies and assets of the forex market and their effect on the overall market trend are reviewed from 19th to 23th December.

A review of last week's important events 

Last week was one of the most significant weeks of 2022 in terms of data and economic events. This week, the central banks of the United States, Europe, England, and Switzerland decided their interest rates and economic policies for the next few months.

On Tuesday, the United States inflation data was published, which was a decrease for the second time in a row; this indicates that inflation is far from its peak. At the time of the inflation data release, the US dollar severely weakened, so the symbols related to the dollar fluctuated and showed a significant movement towards weakening the dollar. In the initial moves of the inflation data release, gold rose by $35 or 350 pips from 1,790 to 1,825, and Dow Jones and Nasdaq stocks rose by 700 and 450 pips, respectively.
As mentioned in the previous weekly analysis, the Federal Reserve meeting took place the day after the news release, and this inflation was already included in the prices of most dollar-related symbols. After the movements and the excitement of the news initial moments, a large part of the movements changed.

On Wednesday, the US Federal Reserve increased its interest rate by 0.5% from 4% to 4.5% and announced the final rate as 5.1% in 2023. With this rate, the analysts concluded the Federal Reserve's policy letter in favor of the dollar and the hawkish policy.Because analysts expected the final rate of the Federal Reserve to be 4.9%, with the interest rate announcement of 5.1%, the dollar strengthened in related symbols.On Wednesday, after the interest rates release and the Federal Reserve statement, the Fed chairman had a press conference to explain more about this financial institution's monetary policy. The financial markets were very volatile during the press conference. Ultimately, this conference's output helped the dollar strength in related symbols so that the dollar continued to be strong until the end of the week. For example, the Dow Jones stock market index dropped 2000 pips.In general, traders and analysts from Wednesday's dollar events concluded hawkish policies and the central bank's increase in interest rate speed. Therefore, the dollar continued strengthening through the end of the week and will likely continue through the end of 2022 and the first weeks of 2023.

On Thursday, the Bank of England increased the interest rate by 0.5%, and the interest rate reached 3.5%.
The Central Bank of England monetary policy release caused the weakness of the pound value in the symbols related to the pound currency pairs.

The European Central Bank increased its interest rate by 0.5% to 2.5%, and this bank's statement was published Simultaneously.Mrs. Lagarde's press conference was very noteworthy.
Ms. Lagarde stated in her press conference that the European Central Bank requires a significant rates' increase and protects a continuous upward change against inflation expectations.According to Ms. Lagarde's statements, the euro currency strengthened in the euro-related crosses.

In the previous week, important data such as another PMI from the British dollar zone and the euro was published, which bears the fear of recession in general. As mentioned before, when there is a recession fear, the US dollar can be sought as a safe asset.

The economic calendar review from December 19 to 23

There will be less economic news in the final weeks of 2022 because of the Christmas holidays. However, what the financial market users should pay attention to is the banks and financial institutions' closure during Christmas, because of this, the trading volume will be less volatile in the financial market like forex. There is also a possibility that we may observe irrational fluctuations in some symbols. Therefore, traders should consider capital management in their trades.
In the coming week, the most important news will relate to the Canadian dollar, the American dollar, and the Japanese yen.


Given the significant data released about the dollar last week, the forex market and symbols related to the dollar can still move well under the influence of the previous week's economic events. Although, there are some important data for the dollar this week.

On Tuesday at 03 pm, the CB consumer confidence index for December (Prev: 100.2 | Forecast: 101) will be published. If a good confidence index is published, it will strengthen the dollar. However, it will cause recession fear if it is much less than expected. And the dollar will strengthen because it will be considered a safe asset.

On Wednesday at 03 pm, the third quarter GDP (prev: 2.9% | forecast: 2.9%) will be published, which shows the American economy's state.Also, the monthly core PCE index for November (prev: 2% | forecast: 2%) will release on Friday at 1:30 pm.


Important inflation data will publish this week on Wednesday at 1:30 pm for the Canadian dollar. These data are significant in a way that if they are published with differences from market expectations, they can change the monetary policies of the Canadian central bank.

To be published inflation data for November is as follows:

Monthly Core Consumer Price Index-Core CPI (Previously: 0.4% | Forecast: -0.1%) Monthly Consumer Price Index-CPI (Prev: 0.7% | Forecast: -0.1%) Annual Core Consumer Price Index-Core CPI (Prev: 5.8% | Forecast: 5.3%)


The Japanese yen is the only important currency that continues its expansionary policies, and this country's central bank interest rate is negative. On Tuesday at 03:01 am, the monetary policies of Japan's central bank are published. And a press conference with this bank's head will be held, which can have important points that will cause changes in the central bank's monetary policies and the Japanese yen. These possible changes can lead to the JPY strengthening and its related currency pairs in the market.

Other currencies

At 12:30 am(UTC) on Tuesday, the Australian Reserve Bank's report of the last meeting in 2022 will publish.

China's interest rate will publish at 12:30 am on Tuesday, which can be important for gold traders.

On Thursday, the UK quarterly and annual GDP will publish at 07 am.

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