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 12th March 2017

Last week, I predicted that the best trades for this week were likely to be short NZD/USD and long USD/CAD. Both these trades were winners, with the NZD/USD falling by 1.73% and the USD/CAD rising by 0.64%. The average gain was 1.19%.

The Forex market remained in a relatively indecisive mood with few clear trends, particularly regarding the U.S. Dollar which is usually the main engine behind major market moves. Although the non-farm payrolls came in last week at a healthy number, it was below the ADP forecast and the market seemed as if it was somewhat disappointed. This suggests that the bullishness in the greenback is somewhat muted and less likely to be the main driver of the Forex market over the coming week.

The most bearish currencies in general against a long-term basket of currencies remain the New Zealand and Canadian Dollars, and to a lesser extent the British Pound. Therefore, I suggest that the best trade of the coming week will be long the U.S. Dollar and short of the New Zealand and Canadian Dollars, as well as the British Pound.

Fundamental Analysis & Market Sentiment

The major element affecting the market right now is the perception that a U.S. rate hike is more likely to happen this week, following recent comments from two members of the FOMC. There are several central bank inputs due later this week, so it seems as if the market will be in a holding pattern and waiting to react to each of them.