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How To Interpret The Economic Calendar?
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Forex market is one of the financial markets which required paying attention to the details both on the technical and fundamental level. Technical analysis will give information about the direction where the price is moving while fundamental analysis tells why the price is moving? Or the reason(s) behind the movement. And by reasons we mean, important economic-events, newly launched products, and other important financial events etc. Good thing is, it can all be found by all-in-one economic calendar where you can keep a tab on all latest economic events and latest launches.
The Advisorymandi's economic calendar is one very important asset required in FX trading and fundamental analysis. It is the reason behind the movement in Forex market. But, knowing what economic calendar really, is not gonna enough to make smart decisions. Every Forex trader must have the sufficient knowledge of the economic calendar. Which is why we would like to do here is describe and how to use it for Forex trading.
Obviously, the first column represents the date or the period under consideration. Above it, there are days set in the chronological order. When the new data released, it will automatically update the economic calendar with the updated date in the left column.
Note: - The time released and appeared will be absolutely accurate.
In currency column, the information of country’s origin and currency of the data release will be mentioned. The currency also stated in the above image represents an economy. Next column is of impact which displayed in the economic calendar and represents the volatility as an indicator of the impact on a particular currency. The three default colors are red, yellow, and orange which indicates the volatility type.
Yellow – represents that the impact of a volatility is very mild and it most likely not going to have a huge impact.
Orange – represents that the news might change in the future, depending on the actual values released when compared with the forecasted value.
Red – represents that the market observers are expecting to have the particular data to move the forex market.
Next are three columns named actual, forecast, and previous.
“Previous” indicates the previous data from the last release. It was the data released last time, so if the news is released monthly then that column will show last month’s data. The “forecast” implies the no. forecasted by experts on the outcome. And “actual” is the no. which displayed once the actual data released.
Final Thoughts: -
The news and information in the economic calendar known in advanced and repeated over time. The economic calendar reflects the strengths and weaknesses of an economy since the economy is related to currency at some point. Which is why the Forex traders use the economic calendar to compare two economies and make decisions based on the analysis? After all, the Forex market trading is all about buying and selling a currency pair.
So, knowing how to interpret the economic calendar can help to predict the direction of the market.
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