Group 1: Fundamental Analysis - Fundamental analysis primarily involves studying various fundamental factors that influence exchange rates to assess currency value trends. These factors encompass economic, political, and social aspects [1] - From an economic perspective, macroeconomic data significantly impacts exchange rates. GDP growth often indicates a country's economic health, potentially attracting foreign investment and leading to currency appreciation. Conversely, high inflation can weaken a currency's purchasing power, resulting in depreciation. Interest rates also play a crucial role; higher rates can attract international capital, increasing demand for the currency and promoting appreciation [1] - Political factors are equally important in the foreign exchange market. Political stability, government policies, and international relations can all affect exchange rates. A stable political environment is foundational for economic development, while political turmoil can erode investor confidence, leading to capital flight and currency depreciation. Fiscal and monetary policies directly influence economic performance and, consequently, exchange rate fluctuations. Trade tensions and geopolitical conflicts can also trigger chain reactions in the foreign exchange market [1] Group 2: Technical Analysis - Technical analysis focuses on studying historical price and volume data to predict future exchange rate trends. Key tools and theories are utilized in this analysis [2] - Candlestick charting is a technique that helps traders identify market direction and buy/sell signals. For instance, a doji candlestick pattern often indicates a temporary balance between buying and selling pressure, potentially signaling a trend reversal [2] - Moving averages are another common technical analysis tool, calculating the average price over a specific period and connecting these averages to reflect price trend changes. The intersection of different moving averages can help traders identify buy and sell points [2] - The Relative Strength Index (RSI) measures the magnitude of recent price changes to evaluate overbought or oversold conditions. An RSI above 70 indicates an overbought market, while an RSI below 30 suggests an oversold market, presenting potential reversal opportunities [2] - A comprehensive approach that combines both fundamental and technical analysis is essential for effective foreign exchange trading. Fundamental analysis provides a macro perspective on market trends, while technical analysis offers specific trading timing based on price and volume data [2]