Fundamental Analysis vs. Technical Analysis

The Debate Continues

One of the dominant debates in financial market analysis is the relative validity of the two major tiers of analysis: Fundamental and technical. In Forex, several studies concluded that fundamental analysis was more effective in predicting trends for the long-term (longer than one year), while technical analysis was more appropriate for shorter time horizons (0-90 days). Combining both approaches was suggested to be best suited for periods between 3 months and one year.

Nonetheless, further empirical evidence reveals that technical analysis of long-term trends helps identify longer-term technical “waves”, and that fundamental factors do trigger short-term developments.

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