MARKET ANALYSIS · Beginner · 6 min read · 3 Nov 2026 · Navion Pro Research
Fundamental or Technical Analysis: What Is the Difference?
There are two broad ways to make sense of a market. One asks why a price should move. The other asks how the price is moving. This guide explains both, and why many traders use a bit of each.
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Key Points
- Fundamental analysis looks at the forces behind a price: the economy, interest rates, company results, supply and demand.
- Technical analysis looks at the price itself: charts, trends, levels and patterns.
- Fundamentals can help explain where a market may head over time. Technicals can help with when to enter and exit.
- Neither method can predict prices. Both are ways to build a view and manage risk around it.
Fundamental analysis: why a price moves
Fundamental analysis studies the things that change what a market is worth. What a trader looks at depends on the market:
- Forex. Interest rates, inflation, growth and central bank decisions in each country.
- Stocks and indices. Company profits, forecasts, debt and the health of the wider economy.
- Commodities. Supply, demand, stock levels and events that disrupt production or transport.
- Bonds. Interest rates and inflation.
- Crypto. Sentiment, adoption, regulation news and interest rates.
A fundamental trader might ask: if inflation is falling and the central bank may cut rates, what could that mean for the currency?
Technical analysis: how a price moves
Technical analysis studies the price chart. It rests on the idea that everything traders know is already reflected in the price, and that traders tend to react in similar ways to similar situations.
A technical trader looks at:
- Trends, to see the main direction.
- Support and resistance, to find levels where the price has turned before.
- Candle shapes, to see who was in control in each period.
- Indicators, such as moving averages, to smooth the price or measure momentum.
A technical trader might ask: the price has bounced off this level three times, so where would a trade make sense, and where would it be proven wrong?
The two side by side
| Fundamental analysis | Technical analysis | |
|---|---|---|
| Main question | Why should the price move? | How is the price moving? |
| What it uses | Economic data, central bank news, company results, supply and demand | Charts, trends, levels, patterns and indicators |
| Typical timeframe | Weeks to months, though big releases move prices in minutes | Any timeframe, from minutes to months |
| Helps most with | Building a view on direction | Timing entries, exits and stop losses |
| Main limit | Markets can ignore the fundamentals for a long time | Patterns can fail, and charts cannot see news coming |
Using both together
Many traders do not choose one side. They use fundamentals to decide what to trade and in which direction, and technicals to decide when and where.
An example: one view, two lenses
This example is for illustration only.
A trader thinks gold could rise because markets expect US interest rates to fall. Lower rates reduce the appeal of assets that pay interest, which has often supported gold. That is the fundamental view.
Rather than buy straight away, the trader checks the chart. Gold has pulled back towards a support level around $3,850 that has held twice before. The trader plans to consider a buy near that level, with a stop loss below it in case the view proves wrong. That is the technical plan.
Fundamentals can give you a reason. Technicals can give you a plan, and a point where you accept you were wrong.
Which one suits you
- If you enjoy following news and the economy, fundamental analysis may come more naturally.
- If you prefer charts and clear rules, technical analysis may suit you better.
- If you trade over minutes or hours, technicals usually matter more, but big data releases still move prices.
- If you hold trades for weeks, fundamentals often play a larger part.
Whichever you lean towards, decide your risk before every trade. No analysis is right every time.
Risk disclosure: Trading involves significant risk of loss and is not suitable for all investors. Past performance is not indicative of future results. This brief is for information and education only. It is not investment advice, a recommendation or an instruction to buy or sell anything. The likely market reactions described here are our assessments of what could happen, not predictions, and markets can and often do move differently. Figures and forecasts come from third party sources and may change. Make your own decisions, and consider independent advice if you are unsure.
