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 25th June 2017
Last week, I passed on making any prediction regarding a best trade for the week. This was probably a wise idea as the market was hit by some surprising developments and an unexpectedly higher level of volatility. I did highlight potential long trade opportunities in Crude Oil and Natural Gas, both of which would now be in profit if taken.
The Forex market is now in a more settled mood, with higher volatility and a re-emergence of clear trends. There is important input expected this week from major central banks, most notably the Federal Reserve. I forecast that the best trades this week will be long EUR/USD and GBP/USD.
Fundamental Analysis & Market Sentiment
The major element affecting market sentiment at present is a view that almost all major central banks have now indicated they are on courses of tightening monetary policy, with the notable exception of the Bank of Japan. Two central banks were seen to change their respective stances over the past week, the European Central Bank and the Bank of England. Although the Federal Reserve was the first major central bank to turn towards a tighter policy, its actions are now being overshadowed. There is a more settled bearish outlook on the U.S. Dollar, which may be either confirmed or overturned this week as there are plenty of major U.S. data releases due, including Non-Farm Payrolls and the FOMC Meeting Minutes.
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