The two main tools that are used in risk management are:

• Fundamental analysis
• Technical analysis.

Fundamental Analysis is an analysis of the economic scenarios and political disposition influencing a currency rate with the objective of determining future movements of the currency in the financial market.  Fundamental analysis is the method of looking at a market trend at the basic or fundamental financial level.
Investors tend to use just the fundamental analysis alone or they use it in combination technical analysis and other tools to evaluate currencies for investment purposes and risk management.
Technical analysis is a study of past trends in currency trading with tools like Fibonacci series, Elliot Wave theory and many other methods, because repetitive research has proved that past trends repeat in frequencies in currency market.