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 7th May 2017
Last week, I predicted that the best trade for this week was likely to be long the British Pound and short of the U.S., Canadian, and New Zealand Dollars. This combination trade was a little unprofitable overall, as although the GBP/USD currency pair rose by 0.24%, the USD/CAD currency pair fell by 0.04%, and the NZD/USD pair rose by 0.83%, producing an overall average loss of 0.21%.
The Forex market is in a mood to look to currencies other than the U.S. Dollar right now, as although we just had the FOMC Statement and Non-Farm Payrolls, they have not produced a decisive market sentiment or any dramatic price movements. The fact that moderately bullish data from the U.S.A. has failed to spark a strong Dollar gain suggests underlying weakness in the greenback. As for political developments, the French election has continued to look as if it will be comfortably won by the centrist candidate today, with the Euro continuing its recent rise.
The greenback remains in neutral, with the British Pound the most clearly strong currency, while Silver has moved into a strong long-term bearish trend with obvious weakness. The Euro is also likely to be strong. Therefore, I suggest that the best trades of the coming week will be long the British Pound and Euro, and short of Silver.
Fundamental Analysis & Market Sentiment
The major elements affecting market sentiment this week are likely to be the result of the French Presidential Election which should become clear late Sunday evening in Europe, followed by some U.S. economic data releases at the end of the week.
