What Is Fundamental Analysis

The chain

Fundamental analysis reads the chain from an economy to the price of its currency. The economy is the things a country does, jobs, prices, growth. The numbers are those things counted and published, on a schedule, to the minute. The central bank reads the numbers and sets the interest rate from them. The rate is what holding the currency earns, and a higher one draws money in. The price is the currency bid up or down as a result, and on 2 July 2026, at the minute a US jobs number was scheduled, the euro against the dollar moved 46.7 pips in five minutes on a day whose usual five-minute move was 2.6. Fundamental analysis reads the first four links. The chart shows only the fifth.

A tree

Picture a tree with its roots showing. The leaves are what everyone sees, and the chart is the leaves: the price, bar by bar, above the ground. The roots are under the ground, jobs, prices and rates, and they are read by the numbers that are published about them. Fundamental analysis is reading the roots. Two people can look at the same tree, one at the leaves and one at the roots, and both are looking at the tree. The price grows from below and shows above, and the minute a number lands is the minute the roots move the leaves, which is why that minute is on the chart.

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