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 20th November 2016
Two weeks ago, I predicted that the best trade for this week was likely to be long USD/CAD. This trade made a nice gain of 1.48%.
The market seems very predictable right now, with the shock victory of Donald Trump in the U.S. Presidential Election on 8th November sending the U.S. Dollar roaring ahead at the expense of most other currencies, particularly the Japanese Yen, Australian Dollar, Swiss Franc and the Euro. This move will run out of steam eventually but there is no reason why it should not continue for a while. The momentum is certainly there and this is a train that is worth being on board.
I therefore suggest that the best trades this week are likely to be long USD against the Japanese Yen, Australian Dollar, Swiss Franc and the Euro.
Fundamental Analysis & Market Sentiment
Fundamental factors are playing a role right now but are difficult to explain fully. What is becoming increasingly clear is that Trump will need to try to deliver on his promise of generating jobs for lower-skilled Americans, and the logically easiest way to achieve that will be federal spending on infrastructure projects. This is boosting the American stock market overall, led by companies that will logically stand to gain from the range of Trump’s known policy positions. As money flows into America to buy American stocks, so the U.S. Dollar is bought and rises in value.
