There are many factors that affect forex trading. It is important to know and understand the various factors that lead to fluctuations in the forex market from day to day. The currency exchange market changes according to the economic factors that play a role in influencing the movement of currencies.

Economic indicators and factors are issued by governments or specialized organizations that have the ability to look in depth at economic performance. These indicators can be used to analyze the economic performance of any country. Economic reports measure the states economic strength in addition to government policies and current events.

For the most part, reputable speculators can look at economic indicators and determine which of them can be better traded. Reports on these indicators are issued on scheduled dates and can give information about whether a particular country is facing an economic improvement or that the economy of that country is in a downturn when Prices fluctuate, which gives good opportunities in one way or another. The price of the currency is affected greatly.

Current events and the state of the economy in a particular country is one of the main economic indicators that are used when analyzing the forex market. Factors such as inflation figures, housing statistics, and the current state of the government of this country can all affect the forex market. When a country feels optimistic about its current economic conditions, the price of a currency The country in the forex market will reflect this matter, while when the country faces a state of political instability or the presence of a large number of unemployed people or inflation, the exchange rate of this country's currency will also reflect this in the market. Sometimes this indicator may be ignored, but it can It plays an important role in measuring volatility in the forex market.

It is one of the other main indicators that are used while looking at the currency market. Domestic product is the most comprehensive and broad measure of the economic situation in a particular country, as it represents the total value of all goods and services produced in this country. This matter is usually measured every year and not over a period of weeks and months. Because the use of large time frames gives more accurate statistics about the goods and services produced in the country, this indicator is not used alone in forecasting the forex market. The GDP is considered a lagging indicator in the sense that it is a factor for measuring the changes that come after the economy has taken some course.

See also: Wide range of InstaForex technical indicators.

retail sales
It is the third economic indicator that is used in analyzing the forex market and expresses the total sales in all retail stores in a country. Usually, the measurement does not include all types of retail sales, but is limited to a sample of retail stores across the country. This indicator is one of the important and documented economic factors. Because it gives an insight into the expected consumer spending patterns during the year, this factor is one of the most important indicators among the lagging indicators, as it gives a clearer picture of the economic situation in any country.

Another important economic indicator that the currency market looks at is
Industrial production report
This report shows production fluctuations in various fields such as factories and public utilities. This report is concerned with actual production in light of the potential production capacity during a certain period of time when a country produces its maximum capacity, this matter positively affects forex and is considered an ideal situation for traders.

Consumer Price Index or CPI
It is the last critical economic indicator in the field of forex market analysis. The consumer price index is a measure of the change in prices of about two hundred categories of consumer goods. This indicator can tell us whether a country is gaining or losing money in its products and services. Exports exported by a country also have great importance when looking at this indicator, because the amount of exports reflects the weakness or strength of the state.

The forex market is affected by many factors. These factors usually follow a specific trend, so it is important to understand how each of these indicators works while using it to predict the forex market. Some of these good indicators can be used alone while others have to be used in conjunction with other indicators to reach them. Accurate forecast of the forex market.