Fundamental analysis consist of....

Interest Rates

If there is an uncertainty in the market in terms of interest rates, then any developments regarding interest rates can have a direct affect on the currency markets. Generally, when a country raises its interest rates, the country's currency will strengthen in relation to other currencies as assets are shifted to gain a higher return. Interest rates hikes, however, are usually not good news for stock markets. This is due to the fact that many investors will withdraw money from a country's stock market when there is a hike of interest rates, causing the country's currency to weaken. Knowing which effect prevails can be tricky, but usually there is an agreement among the field as to what the interest rate move will do. PPI, CPI, and GDP have proven to be the indicators with the biggest impact. The timing of interest rate moves is usually known in advance. It is generally known that these moves take place after regular meetings of the BOE, FED, ECB, BOJ, and other central banks.

International Trade

The trade balance portrays the net difference (over a period of time) between the imports and exports of a nation. When imports become more than exports, the trade balance shows a deficit (this is --for the most part-- considered unfavorable). For example, if Euros are sold for other domestic national currencies, such as US Dollars, to pay for imports, the value of the currency will depreciate due to the flow of dollars outside the country. On the other hand, if trade figures show an increase in exports, money will flow into the country and increase the value of the currency. In some ways, however, a deficit in and of itself is not necessarily a bad thing. A deficit is only negative if the deficit is greater than market expectations and therefore will trigger a negative price movement.

Consumer Price Index (CPI)

Measures the change in prices at the consumer level for a fixed basket of goods and services paid for by a typical consumer. Items included in the CPI reflect prices of food, clothing, shelter, fuels, transportation, health care and all other goods and services that people buy for day-to-day living. These items are divided into seven categories (housing, food, transportation, medical care, apparel, entertainment, and other), each of which is weighted by their relative importance. As in the case with the PPI, markets focus on the figure excluding food and energy items (called the core CPI) for a truer picture of inflationary forces. Since food and energy prices could fluctuate due to conditions that are unrelated to the economy--such as weather, oil supply or wars-- it is important to break down the factors impacting the change in prices.

Durable Goods Orders

These include large ticket items such as capital goods (machinery, plant and equipment), transportation and defense orders. They are extremely important in that they anticipate changes in production and thus, signal turns in the economic cycle.

But the large size of these items (aircrafts and civilian orders) means that they present equally large changes, which makes them extremely volatile. This also give rise to sizeable revisions in the subsequent periods once more complete data become available one week later. Durable goods data are better used when omitting defense orders and transportation orders, while calculating a three-month moving average, and a year-to-year percent change.

Employment Report

In the US, the employment report, also known as the labor report, is regarded as the most important among all economic indicators. Usually released on the first Friday of the month, the report provides the first comprehensive look at the economy, covering nine economic categories. Here are the 3 main components of the report: Payroll Employment: Measures the change in number of workers in a given month. It is important to compare this figure to a monthly moving average (6 or 9 months) so as to capture a true perspective of the trend in labor market strength. Equally important are the frequent revisions for the prior months, which are often significant.

Unemployment Rate: The percentage of the civilian labor force actively looking for employment but unable to find jobs. Although it is a highly proclaimed figure (due to simplicity of the number and its political implications ), the unemployment rate gets relatively less importance in the markets because it is known to be a lagging indicator--It usually falls behind economic turns. Average Hourly Earnings Growth: The growth rate between one month's average hourly rate and another's sheds light on wage growth and, hence, assesses the potential of wage-push inflation. The year-on-year rate is also important in capturing the longer-term trend.

Gross Domestic Product (GDP)

Measures the market value of goods and services produced in a country, regardless of the nationality of the firm owning these resources. There are four major components of the GDP are: consumption, investment, government purchases, and net exports. The headline figure is the quarterly release of the percentage growth over the previous quarter (q/q) or year (y/y). The GDP report has three releases: i) advanced release (first); ii) preliminary release (1st revision); and iii) final release (2nd and last revision). These revisions usually have a substantial impact on the markets.

Producer Price Index (PPI)

Measures the monthly change in wholesale prices and is broken down by commodity, industry and stage of production. It is an accurate precursor of the important Consumer Prices Index (CPI) figure. Markets usually focus on the PPI excluding volatile food and energy items (called the core rate) for a truer picture of inflationary forces.

Retail Sales

Measures the percentage monthly change in total receipts of retail stores, and includes both durable and non-durable goods. It is the first real indication of the strength of consumer expenditure. The limits of the retail sales figure, however, lie in the fact that it focuses on goods while ignoring services and other items such as insurance and legal fees. In addition, the report is stated in nominal terms rather than real, thus, not accounting for inflation. The retail sales figure is also subject to sizeable revisions, even when excluding auto sales (core retail sales).

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Why Technical analysts? its because... 

Market movement considers everything
This is the most important postulate of technical analysis. It is crucial to understand it in order to grasp rightly the procedures of analysis. The gist of it is that any factor that influences the price of securities, whether economic, political, or psychological, has already been taken into account and reflected in the price chart. In other words, every price change is accompanied by a change in external factors. The main inference of this premise is the necessity to follow closely the price movements and analyze them. By means of analyzing price charts and multiple other indicators, a technical analyst comes to the point that the market itself shows to her/him the trend it will most likely follow.
This premise is in conflict with fundamental analysis where the attention is primarily paid to the study of factors, and later on, after the analysis of the factors, to conclusions as to the market trends are made. Thus, if the demand is higher than the supply, a fundamental analyst will come to the conclusion that the price will grow. Technical analyst, however, makes her/his conclusions in the opposite sequence: since the price has grown, it means the demand is higher than the supply.

The prices move with the trend
This assumption is the basis for all methods of technical analysis, as a market that moves in accordance with trends can be analyzed, unlike a chaotic market. The postulate that the price movement is a result of a trend has two effects. The first one implies that the current trend will most likely continue and will not reverse itself, thus, excluding disorderly chaotic movement of the market. The second one implies that the current trend will go on until the opposite trend sets in.

The history repeats itself
Technical analysis and studies of market dynamics are closely related to the studies of human psychology. Thus, the graphical price models identified and classified within the last hundred years depict core characteristics of the psychological state of the market. First of all, they show the moods currently prevailing in the market, whether bullish or bearish. Since these models worked in the past, we have reasons to suppose that they will work in the future, for they are based on human psychology which remains almost unchaged over years. We can reword the last postulate — the story repeats itself — in a slightly different way: the key to understanding the future lies in the studies of the past.