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 March 11

In my previous piece last week, I saw the best possible trades for the coming week as long of the EUR/USD currency pair, and short of the USD/JPY currency pair. The EUR/USD currency pair fell by 0.10% while the USD/JPY currency pair rose by 1.04%, producing an average loss of 0.57%.

The most important development in the market last week was the very positive non-farm payrolls data which was released on Friday, which came in significantly above the consensus forecast. The U.S. added another 313,000 new jobs when only 205,000 were expected. However, average hourly earnings came in lower than expected. This produced a combined result of the market seeing the U.S. economy strong, but not overheating to the extent where the pace of rate hikes would need to be quickened. This gave the stock market a boost, with the benchmark S&P Index making its highest close since February 1. The U.S. technology index of the NASDAQ’s major 100 shares closed at an all-time high, indicating how firmly the technology sector has bounced back.

The Japanese Yen, the Euro, and the Canadian Dollar all saw central bank guidance events occurring last week. The Bank of Japan indicated no change, the Bank of Canada took a slightly more dovish line over the tariffs issue, and the European Central Bank took a slightly more hawkish stance as it removed wording suggesting a willingness to expand QE if necessary. However, it is the greenback which dominates, and it remained mostly unchanged over the week.