Some factors considered in fundamental analysis:
- Economic data – the release of economic data like; unemployment rates, and interest rates, can play a big role in price fluctuation.
- Weather and natural events – these factors can have a major impacts on the supply and demand of specific assets.
- Politics – many political events can have a significant impact on the price of certain assets.
Fundamental analysis helps traders gather the correct information, needed to make a rational decision and to understand the value of the asset, anticipate and predict future price trends in order to take a longer view of the market. While using fundamental analysis, it is important to keep in mind that factors causing a shift in the fundamentals of these assets can vary between asset classes.
For example, if you are using fundamental analysis to look at a stock, the trader should consider factors like mergers and acquisitions, company news, earning reports etc.
Currencies can be most affected by changes to interest rates, geopolitical events and world economies.
Some of the factors that has the biggest effect on agricultural commodities is natural events and major weather events, like extreme heat or cold, parasites or floods.