It is an analysis method to predict the exchange rate fluctuations in the future by analyzing the “fundamental parts of the economy" such as interest rates policy or employment statistics announcement.
Financial experts and think-tanks first make predictions about the expected numerical value of economic indicators, then information vendors such as Reuters gather forecast information, and finally consensus is reached to form early market expectations.
Also, it is important how the actual numerical values were announced (whether they really are as expected, or there is a gap between the actual and expected values) because the results could be a contributing factor to a great fluctuation in the market (market price) after announcement.
On the other hand, within several minutes after the economic indicators announcement, the probability that forex changes in one direction is very high; therefore it is possible to make money using this movement in binary option or FX trading.
How to make money using employment statistics announcement
The U.S. Employment statistics are usually announced by the U.S. Department of Labor at 8:30 New York time on the first Friday of every Month.
The U.S Employment Statistics consist of more than 10 items, in which 2 items are of particular interest due to their significant figures. They are “the numbers of employers in non-agriculture sector” and “Unemployment rate”.
Generally, when the actual economic indicators turn out better than expected (the numbers of employers in non-agriculture sector increases), there is a tendency to buy dollars.
If the actual announcement values vary greatly from the expected values, there will be a high chance of large forex fluctuation. This is an opportunity to earn more money.