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 6th November 2016
Last week I predicted that the best trade for this week was likely to be long USD/CAD. This trade made a tiny gain of 0.06%.
The market seems harder to forecast this week, as much will depend upon the outcome of the U.S. Presidential Election on Tuesday, the outcome of which is uncertain. Nevertheless, I believe Clinton will win, which should strengthen the U.S. Dollar.
I therefore suggest that the best trade this week is likely to again be long USD/CAD as the USD held up best against the CAD during its period of relative weakness over the past week.
Fundamental Analysis & Market Sentiment
Fundamental analysis is of little use right now, it is more a case of political developments and sentiment being of primary importance, although of course these factors influence fundamental economics.
The two currencies that stand out here are the U.S. Dollar and the British Pound.
The U.S. Presidential Election will complete on Tuesday, and the result is likely to have a meaningful effect upon stock markets (especially the U.S. stock market) and the U.S. Dollar, with an against-the-odds Trump victory likely to be bad for both, at least over the short term.
Last week saw a court ruling in the U.K. which puts Brexit in possible danger, and this boosted the British Pound over recent days to the extent that it was the biggest riser of the week. It is probable that this effect will continue for some time.
