The difference between success and failure in Forex trading is very likely to depend upon which currency pairs you choose to trade each week, and not on the exact trading methods you might use to determine trade entries and exits. Each week I am going to analyze fundamentals, sentiment and technical positions in order to determine which currency pairs are most likely to produce the easiest and most profitable trading opportunities over the next week. In some cases it will be trading the trend. In other cases it will be trading support and resistance levels during more ranging markets.
Big Picture November 18
In my previous piece last week, I forecast that the best trades would be short of the EUR/USD and Gold and long of USD/CAD. Unfortunately, these were all losing trades. EUR/USD rose by 0.71%, USD/CAD rose by 0.47%, and Gold rose by 1.05%, giving an averaged loss of 0.74%.
Last week saw a rise in the relative value of the New Zealand Dollar, and a fall in the relative value of the British Pound.
Last week’s Forex market was dominated by news that the British government had approved a draft Brexit deal and ongoing uncertainty as to whether the deal could secure the approval of the British Parliament. It seems likely that the Pound will fluctuate as long as the uncertainty over the Brexit outcome persists.
Very positive New Zealand economic data, as well as a slightly hawkish FOMC release, boosted the U.S. Dollar. The bullish USD trend is surviving.
This week is likely to be dominated by forthcoming Australian and Canadian data, as well as British political instability.
Fundamental Analysis & Market Sentiment
Fundamental analysis still tends to support the U.S. Dollar, as American economic fundamentals continue to look strong. Sentiment seems to be still in favor of the U.S. Dollar as despite quite strong recent selloffs in the stock market, the economic fundamentals are still widely seen as good, although there is now an increasing belief that the Federal Reserve should hold off on rate hikes to over over-cooling the economy: some economists are now arguing that U.S. growth is cooling off already. Fundamentals remain bearish on the Japanese Yen, but this currency can still benefit from safe-haven “risk off” money flow.
