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 January 14th 2018

In my previous piece last week, I saw the best possible trades for the coming week as long of the S&P 500 Index, long of the precious metal Palladium, and long of the Forex currency pair EUR/USD. The individual results were all excellent, with the S&P 500 Index rising this week by 1.73%, while Palladium rose by 2.89%, and EUR/USD rose by 1.46%, producing an average gain of 2.03%.

The Forex market over the past several weeks has been bearish on the U.S. Dollar, despite last month’s interest rate hike. Technically the Dollar is below its prices of three and six months ago, which puts it in a long-term downwards trend. Despite slightly stronger than expected U.S. inflation data being released at the end of last week, the Dollar continued to fall and ended a strongly downwards week right on its low. The Euro has the greatest long-term strength of any major currency.

The news agenda this week is almost certainly going to be dominated by a slew of key data from China, Australia, and the U.K. plus the Bank of Canada’s monthly guidance. This may move the spotlight away from the U.S. Dollar.

The American stock market is in a strong long-term bullish trend, and it made a new all-time high price on Friday. Of the three major Forex pairs, both the EUR/USD and to a lesser extent the GBP/USD are in convincing long-term bullish trends. The EUR/USD currency pair just made a new three-year high price.