Fundamental analysis is a very effective way to forecast economic conditions, but not necessarily exact market prices, and you SHOULD trade in agreement with the supporting technical indicators.
Foreign exchange traders put the most emphasis on technical analysis, because traders around the world use similar charts and tools in predicting market trends.
The reason the FOREX market can be so predictable some times is that if the majority are using the same graph for determining patterns and trends, then it is highly likely that they will act in a similar manner.
So several thousand traders who have all charted the same resistance line, for example, will most likely either set their trades and direction conform to that line.
When fundamental data is made available to the public there is a reaction from investors and speculators.
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