It is a subjective matter but I feel that to tame this random forex market and make the best out of it, technical and fundamental analysis is of considerable help, at least it is for me and many traders like me I guess.
Let me clarify my point. Fundamental analysis is a forecast of what is likely to unfold into the future, based on a wide range of factors. Technical analysis looks at price action today to inform us about what is happening now. You can combine these two methods to gain insight into what is likely to happen next, and to time market entries and exits based on what is happening today. So from this perspective, I agree with you and others that technical and fundamental analysis ought to be combined.
But here's the problem. Technical and fundamental analysis evolved from the stockmarket, where all participants share a common cause...to invest for profit. This is simply not the case in the Forex market, where around 95% of its volume is derived from participants that could not care less about investment returns. For example, nearly half of daily Forex turnover represents foreign exchange swaps, the simultaneous purchase and sale of identical amounts of one currency for another with two different value dates, with the single aim of swapping interest rates. Another 19% is derived from international trade, tourism, and foreign aid transactions. In fact, spot currency transactions represent just one-third of the daily turnover, and the vast bulk of this is interbank activity. You and I, us retail traders, represent just 4%-5% of the daily turnover, and we are the only players seeking investment returns from speculative activities.
Effectively, a 1% fluctuation in the 95% group will translate into a 20% impact on the 5% group...us...with that impact having no relationship whatsoever with current technical or fundamental factors. In the long term, I agree that fundamentals will dictate the ultimate value of a currency, but can you sustain those 1% fluctuations along the way? If not, fundamental analysis may add no value to your strategy. Better to evaluate currency strength-weakness, and follow the money flow!