AS technical traders we tend to discount fundamental data in the short run – but any trader must know that fundamental data has a profound effect on markets over the long run. So we would like to introduce a term into the vocabulary of the short term trader a new term – fundamental data pressure (FMP).

Our definition of the term is simply this: “The long term pressure on a market to move in one direction or another.” The best way we can describe it is to liken FMP to gravity. Gravity is scientifically a very weak force in the scheme of things. BUT! And that is a very large BUT, it is persistent.

Other market forces ebb and flow, so to speak, but FMP is persistent. Whenever any of the other forces that tend to move a market relax – even for an instant – FMP is there to move the market it its desired direction. So we technical traders need to be ware of FMP – and understand its direction at the moment. It may be a weak force, like gravity, but it is persistent and eventually will have its way with any market.

This is especially true with FOREX markets – that are so trend dependent. When a FOREX market makes a substantial move AGAINST FMP, a longer term trading possibility is created that can be especially profitable. Take the USDJPY pair; the FMP for the dollar is not really good – BUT the FMP for the yen is far worse – so the net FMP for the pair is decidedly in favor or the bulls at this point.

Our analysis indicates that the USDJPY is about to make a large bull move and the FMP – along with our technical indicators – says it is a good bet.

 

 

 

 

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