The difference between success and failure in Forex trading will most likely depend on the currency pairs you choose to trade each week, not the exact trading methods you could use to determine the trading inputs and outputs. Every week, I will analyze fundamentals, sentiments and technical positions to determine the currency pairs that can generate the easiest and most profitable trading opportunities of the week ahead. In some cases, this will be the trend. In other cases, it will be levels of support and resistance to trade in more diversified markets.
In my previous article last week, I had forecast that the best deals would be: the S & P 500 Index, short GBP / USD, and short USD / CAD below the low price of the week last. The S & P 500 Index gained 1.14%, GBP / USD gained 0.38% and USD / CAD closed 0.09% lower than last week’s low. These transactions represent an average gain for the week of 0.28%.
Last week, the foreign exchange market recorded the largest rise in the relative value of the New Zealand dollar and the largest decline in the relative value of the US dollar.
Last week’s market was dominated by a more accommodating speech by the US Federal Reserve Chairman regarding interest rate cuts. This weakened the US dollar and pushed the US stock market to new record highs.
The foreign exchange market was less active last week, with almost all up slightly against the US dollar.
This week’s news program is slimmer than last week’s program. It is therefore possible that markets change little over the next few days.
Fundamental Analysis & Market Sentiment
Fundamental analysis now considers that the Federal Reserve is more likely to reduce rates in the short and medium term, the recent headline indicating the high number of new jobs masking a deeper picture of the slowdown in growth. Despite this, the economy continues to experience strong growth and the US stock market posts new record prices.
Market sentiment is more risky, which occurs mainly outside the foreign exchange market, as equities, gold and crude oil rise against the US dollar.
U.S. Dollar Index
The weekly price chart below shows that the USD index fell last week, posting a relatively small bearish candlestick that closed at its lowest level, which is a bearish sign. However, the price is up over 3 months and 6 months, indicating an uptrend. This trend has slowed down considerably to move closer to consolidation in recent months, but remains intact now.
S&P 500 Index
The weekly chart below shows that last week printed a bullish candlestick that closed on the rise, at a record weekly closing price. These are bullish signs; However, the volatility was relatively low, suggesting that the bulls might want to be a little more cautious here for a sudden reversal. Another positive factor reinforcing the bullish case is that the psychological number of 3000 people has been exceeded.
The weekly chart below shows that the pair last week printed another bearish candlestick, a pin candlestick that closed very close to its low point – these are bearish signs. Although the weekly close was the lowest in nine months, it is worrying that the 1.3000 has continued to hold. Nevertheless, it is appropriate to take a prudent bearish bias here.
The weekly chart below shows that last week printed a bullish domestic candlestick that closed at a record weekly close price of nearly 6 years. These are bullish signs; However, the volatility was low and the high psychological level at $ 1425 is just ahead of the current price, suggesting that bulls might want to be at least a bit cautious here.
This week, I expect that the best deals will be on the S & P 500, long gold in US dollars, after a daily close above $ 1,425, and short positions in USD / CAD.
Published by SkRimon