There are two analytical models applied to market movement forecasts: fundamental, and technical (the study using graphical charts of past behavior of currency prices).

Fundamental analysis examines economic, political and social indicators to predict the economic health of a nation. Currencies can be viewed as the international representatives of national economies; it follows, therefore, that economic health is an important component in currency valuation. The fundamental analyst constructs forecast models based on a myriad of different indicators to predict future currency movement.

This section outlines a number of theories and indicators—as well as political dimensions and monetary considerations—that are important in constructing Forex forecast models.