Forex traders use a variety of trading strategies based on technical and fundamental analysis. Nowadays, technical trading is becoming increasingly popular and traders are using a variety of technical indicators, such as trend lines, support and resistance levels, and numerous other methods, to identify short-to-medium-term trading opportunities.
Some traders choose to use fundamental analysis, which revolves around interpreting economic information including news, government reports, and sometimes even rumors. Often, however, it is elements outside of technical and fundamental analysis that have the most dramatic effect on currency prices. This includes events such as central bank intervention, interest rate changes, political change, or even war.