1. What Is Forex? (Major vs Minor Currency Pairs)

Forex, short for “foreign exchange”, is the global marketplace where currencies are bought and sold.

It’s the largest and most liquid financial market in the world, with trillions of dollars traded every single day, yes, trillions.

Every Forex trade involves two currencies.

People always buying one while selling the other; this is why Forex is traded in pairs.

Major Pairs

Major pairs all include the US dollar and are the most traded. Examples include:

• EUR/USD
• GBP/USD
• USD/JPY
• USD/CHF

These pairs tend to have lower spreads and higher liquidity.

Minor Pairs

Minor pairs don’t involve the US dollar. Examples include:

• EUR/GBP
• GBP/JPY
• AUD/NZD

They can be slightly more volatile and have higher spreads.

Understanding these pairs is essential, because everything we do in Forex, from analysing price to managing risk, revolves around how these currencies move relative to one another.

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2. How the Forex Market Works (Spot, Futures, Sessions)

Forex is unique because it operates 24 hours a day, five days a week.

This is possible because the market follows the sun across the world’s major financial centres.

Forex Sessions:

• Sydney Session
• Tokyo Session
• London Session
• New York Session

The most active periods often occur when sessions overlap, especially London + New York.

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3. What Fundamentals Move the Markets?

Now you must have heard the terms technical analysis and fundamental analysis. Whereby technical analysis is solely based on the movements of the candlesticks.

Whereas fundamental analysis is based on actual value, influenced by numerous real-world effects.

In stocks, fundamentals include a company’s revenue, P/E ratio, debt, and assets, among other factors. But forex does not have this type of data.

So how do we analyse Forex fundamentals?

Six highly important pieces of economic data that act as forex fundamentals are listed out here.

Indicator	Importance	Frequency
Interest Rate Decisions	Extremely High	Monthly/Quarterly
Non-Farm Payrolls (US, but other countries use different names)	Very High	Monthly
Inflation (CPI)	High	Monthly
GDP	High	Quarerly
Unemployement	Moderate	Monthly
PMI Services / Manufacturing	Low	Monthly

3.1 Interest Rate Decisions

This is often the biggest mover.

• Current Rate: 5.25%
• Expected: No change
• Actual: Rate cut to 5.00%
  • Investors flee lower-yield currency
  • USD falls across the board
  • EUR/USD moves higher
  • Gold likely spikes

Even if the rate doesn’t change: hawkish tone = currency up, dovish tone = currency down.

eg. USD/JPY

18th Sept 2024 – 15 minute TF

Before US Interest rate announcement

Previous: 5.5%

Forecast: 5.25%

eg. USD/JPY

18th Sept 2024 – 15 minute TF

After US Interest rate announcement

Actual: 5%

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3.2 Non-Farm Payrolls (NFP)

If results are HIGHER than expected → Strong economy → USD usually strengthens

If results are LOWER than expected → Weak economy → USD usually weakens

• Forecast: +180,000 jobs
• Actual: +290,000 jobs (much stronger)
  • USD/JPY jumps up (USD stronger)
  • EUR/USD falls (USD stronger)

Why: More jobs → higher spending → potential rate hikes → stronger USD

eg. GBP/USD

2nd May 2025 – 15 minute TF

Before US Non-farm

Previous: 185K

Forecast: 130K

eg. GBP/USD

2nd May 2025 – 15 minute TF

After US Non-farm

Actual: 177K

3.3 Consumer Price Index (CPI) — Inflation Data

Inflation drives central bank decisions.

Example:

• Forecast: 3.1% YoY
• Actual: 4.0% YoY (big inflation miss)
  • Markets expect rate hikes
  • GBP/USD rises if this were UK data
  • USD/CHF rises if this were US data

Opposite scenario:

• Actual comes in below forecast → Rate cuts likely → Currency weakens

eg. GBP/USD

12th Feb 2025 – 15 minute TF

Before US CPI Inflation Rate Data

Previous: 0.4%

Forecast: 0.3%

eg. GBP/USD

12th Feb 2025 – 15 minute TF

After US CPI Inflation Rate Data

Actual: 0.5%

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3.4 GDP Growth

Measures national economic performance.

Example:

• Forecast: +1.8%
• Actual:+0.3%
  • Weak growth → Weak currency
  • EUR/USD rises if there’s poor U.S. GDP
  • USD/JPY falls

Opposite also true: If GDP beats forecasts, currency usually strengthens.

eg. GBP/USD

25th September 2025 – 15 minute TF

Before US GDP QoQ Final

Previous: -0.6%

Forecast: 3.3%

eg. GBP/USD

25th September 2025 – 15 minute TF

After US GDP QoQ Final

Actual: 3.8%

3.5 Unemployment Rate

Shows % of people actively looking for work but jobless.

Example:

• Forecast: 4.0%
• Actual: 4.4% (worse than expected) → USD drops

Reason: More unemployment = economy weakening = rate cuts more likely

eg. GBP/USD

14th October 2025 – 15 minute TF

Before the UK Unemployment Rate

Previousa: 4.7%

Forecast: 4.7%

eg. GBP/USD

14th October 2025 – 15 minute TF

After the UK Unemployment Rate

Actual: 4.8%

3.6 PMI – Purchasing Managers’ Index

Measures business expansion or contraction. (Above 50 = growth | Below 50 = contraction)

Example:

• Forecast: 50.8
• Actual: 47.2 (below expansion line) → USD falls rapidly

Reason: Early signal economy is slowing → bearish for currency

eg. GBP/USD

7th Jan 2025 – 15 minute TF

Before the US Services PMI

Previous: 52.1

Forecast: 53.3

eg. GBP/USD

7th Jan 2025 – 15 minute TF

After the US Services PMI

Actual: 54.1