When dealing with currency forecasting, there are four criteria. Forecasters must meet at least one to be successful. First, you must have an exclusive use of a superior forecasting model. Second, have consistent access to information before other investors. The first two are merely intended for self correcting. Third, exploit small but temporary deviations from equilibrium. This criterion is how foreign exchange traders earn their living. Finally, be able to predict the nature of government intervention in the foreign exchange market. This last one may be the most important. Consistently profitable predictions are possible in the long run only if you are not trying to outguess the market. When following the previously mentioned criteria’s, you are setting yourself up for successful currency forecasting.  The downturn to currency forecasting is the potential of periodic and unpredictable government interventions. Although this difficulty has not stopped the interest in currency forecasts, nor did it damage the willingness of economist and others to supply them.  There are two model-based forecast approaches, fundamental analysis and technical analysis. Fundamental analysis is an approach to forecasting asset prices that relies on painstaking examination of the macroeconomic variable and policies that are likely to influence the asset’s prospects. When using fundamental analysts, difficulties may occur when selecting the right fundamental. The forecast may become even more complex when you begin to forecast the fundamental. Further, when selecting your fundamental, it must differ from those within the market.  The next approach is technical analysis. This approach focuses exclusively on past price and volume movements, while completely ignoring economic and political factors, when forecasting the future asset prices. There are two primary technical analysis, charting and trends analysis. Charting consists of using bar charts or computer based techniques to find recurring price patterns. Trend analysis use mathematical computations to find such price trends.