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 October 15

Last week, I saw the best possible trades for the coming week as short GBP/USD, and long of the S&P 500 Index in U.S. Dollars. The overall result was negative, as the GBP/USD rose by 1.64%, while the S&P 500 Index rose by only 0.26%, producing an average loss of 0.69%.

The Forex market over the past week has moved against the U.S. Dollar again, in line with the long-term bearish trend in the greenback. The news was not really dominated by anything decisive beyond the weak Core CPI number, and the market’s movements were quite small.

The news agenda this week is almost certainly going to be dominated by British and Chinese economic data releases. The British Pound has been very volatile in recent weeks, and due to the calendar, this is likely to continue over the following week. It recovered quite strongly last week.

The American stock market is still making new all-time highs which is always a bullish sign.

Following the current picture, I see the highest probability trades this week as long of the British Pound against the U.S. Dollar, and long of the S&P 500 in U.S. Dollar terms.

Fundamental Analysis & Market Sentiment

Sentiment is currently more bearish on the U.S. Dollar following last week’s worse than expected Core CPI data. Following President Trump’s de-certification of the Iran deal, there may be an increase in geopolitical tension this week, which could weaken the U.S. Dollar against safe havens such as the Japanese Yen and precious metals such as Gold.