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 8th October 2017
Last week, I saw the best possible trade for the coming week as long of the Euro, and short of the Japanese Yen. The result was negative, as the EUR/JPY fell by 0.56%.
The Forex market over the past week has moved more firmly into a U.S. Dollar counter-trend mode, along with a weak British Pound. The news was dominated by the U.S. Federal Reserve’s more hawkish expression of its anticipated monetary policy tack, and a mixed result on Friday with a tightening Labor market but weaker jobs numbers seeing the Dollar gain initially, but give up those gains at the end of the session.
The news agenda this week is almost certainly going to be dominated by U.S. data, the most important of which is likely to be the FOMC Meeting Minutes, as well as later CPI and Retail Sales data. There is also speculation as to whether the Trump administration will certify Iran as in compliance with the nuclear deal, the deadline for which is next Sunday. This question could create greater risk-on or risk-off sentiment.
The British Pound has been falling steadily for four weeks, and was by far the biggest mover of the major currencies last week. The position of the British government has continued to deteriorate following a disastrous party conference for the Government, prompting renewed speculation over the continuing leadership of Prime Minister May, as pessimism over Brexit and the political split within the governing Conservative Party deepens. There was also some poorer than expected economic data released.
