How GDP Affects Forex Trading and Market Movements

Today we are going to learn one of the most important economic indicators that is very important in fundamental analysis. This indicator is very effective in the Forex market. To be successful in the Forex market you need to learn two important lessons. The first is technical analysis and the second is fundamental analysis. Today we are going to talk about fundamental analysis and introduce you to one of the most important economic indicators.

The GDP index

The GDP index examines the economy of a country. The published amount of this index is very important to traders because it causes price changes in Forex currency pairs. When a country’s GDP index is negative, it means that the country’s economy is weakening. But if the expected value of this index is higher than the predicted value, it will make the currency of that country stronger and its price will rise.

To check the fundamental news we can use the Forex Factory website. On this site, important news is displayed in red. This means that it is very important and can have a great impact on the economy of that country.

photo by forex factory Website

Notice the image above, the value of the published GDP index is lower than the predicted value, and this will cause the Canadian dollar to weaken.

photo from TradingView

In the above chart, we have marked the time when the GDP index was released with a green box, as you know, the GDP index was lower than its predicted value, which weakens the CAD currency. As a result, we see the formation of a red and falling candles in the CADCHF currency pair. At this point, we could make a profit by opening a selling position.

We hope you enjoyed this article.