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 21st May 2017
Last week, I predicted that the best trade for this week was likely to be long the British Pound and Euro, and short of the U.S. Dollar. I couldn’t have been more correct, unless I had picked the Swiss Franc instead of the British Pound. This combination trade was highly profitable from every angle, with EUR/USD rising by 2.52%, and the GBP/USD currency pair also rising, by 1.17%. This produced an average profit of 1.85%.
The Forex market is in a more settled mood, with clear trends against the U.S. Dollar and in favor of the Euro, British Pound, and Swiss Franc. Gold has also performed quite well. Therefore, I suggest that the best trades of the coming week will be long the Euro, Swiss Franc, and British Pound, and short of the U.S. Dollar.
Fundamental Analysis & Market Sentiment
The major elements affecting market sentiment at present are political instability in the U.S.A., which is hurting the U.S. Dollar, and sending a flow of money into safe-haven assets. There is also renewed optimism about the strength of the British economy following much better than expected retail sales data. These positions are unlikely to change before Wednesday, when new FOMC meeting minutes will become a major focus for the market. Leaks concerning allegations against the Trump administration may happen at any time and could shake sentiment further against the U.S. Dollar.
