Suppose the price breaks the resistance and maintains its position above, then a trader may expect it to reach the next resistance of 2,604 USD.
Fundamental analysis for beginners
Fundamental analysis evaluates broader economic factors, such as interest rates, inflation, fiscal policies, and geopolitical events. These factors affect asset values: for instance, a strengthening U.S. dollar often exerts downward pressure on commodities priced in dollars, like gold. Recently, gold experienced its steepest weekly drop in over five months as the dollar surged amid economic shifts, leading investors to reassess the metal’s appeal as a safe-haven asset.
As Trump’s second term unfolds, his administration’s fiscal policies, including potential tariffs and adjustments to immigration, are expected to shape both inflation and investor sentiment significantly. The heightened prospect of tariffs on imports could spur inflationary pressures, potentially prompting the Federal Reserve to reassess its rate policy. Should inflation rise, the Fed may delay any planned rate cuts, which could increase interest rates, bond yields, and deposit interest rates. In this scenario, the gold’s price is likely to decrease because the opportunity cost of holding gold in portfolios increases.
Combined analytical approach is a win-win
Combining technical and fundamental analysis provides a more comprehensive understanding of market conditions, enhancing the accuracy of price analysis. Technical analysis focuses on historical price patterns and statistical indicators to predict potential price movement. At the same time, fundamental analysis evaluates broader economic factors, such as inflation rates, geopolitical events, and monetary policy shifts, that may ramp up or drop asset prices. Combining both allows traders to see a broader picture and take into account all factors potentially affecting an asset’s value.
For example, if technical analysis shows that gold is nearing a support level, a trader might look to buy if the price reverses off the level. To validate the assumption, one examines global economic data or recent policy changes to gauge whether market conditions support a potential reversal at that level. Traders not willing to spend hours monitoring the market can use solutions like Space by OctaTrader, which offers timely and personified analytical posts from Octa’s experts with trading ideas relevant to their trading style. Such an approach creates a more robust strategy, enabling traders to align technical signals with economic trends and reduce the risk of relying on a single analytical method.
Tracking an asset’s price is essential for developing a disciplined trading approach. Beginners should carefully rely on data to forecast market behaviour, grounding predictions in trustworthy information rather than speculation. Making impulsive decisions won’t help to develop expertise and succeed in the long term. Hence, traders should double-check their decisions, looking for additional proof of a certain trading assumption. Those who lack practice can use demo accounts to test their strategies without financial risk. At the same time, such an approach helps to build confidence before trading with real money.
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Octa
Octa is an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 52 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools.
The company is involved in a comprehensive network of charitable and humanitarian initiatives, including the improvement of educational infrastructure and short-notice relief projects supporting local communities.
In the APAC region, Octa received the ‘Best Trading Platform Malaysia 2024’ and the ‘Most Reliable Broker Asia 2023’ awards from Brands and Business Magazine and International Global Forex Awards, respectively.
