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 3rd December 2017
Last week, I saw the best possible trades for the coming week as long of the S&P 500 Index, long of Crude Oil in U.S. Dollar terms, and long of GBP/USD. The individual results were mixed, but the overall result was positive, as the S&P 500 Index rose by 1.58%, the GBP/USD currency pair rose by 1.00%, and Crude Oil fell by 1.14%, producing an average gain of 0.48%.
The Forex market over the past week has continued its bearish turn on the U.S. Dollar, although it looks as if this movement might now be running out of momentum. It is hard to say what will happen next, as there are major political developments. Firstly the U.S. Congress has passed some kind of tax reform bill, and major tax cuts now seem set to happen. This is boosting the stock market and should boost the U.S. Dollar also. However, President Trump’s former National Security advisor has pleaded guilty to deceiving the FBI, and this might turn into a major problem for the President’s administration. As time goes by, that is looking less likely though, so the Dollar could be set for a recovery.
The news agenda this week is almost certainly going to be dominated by the ongoing political developments in the U.S.A. and the crucial Non-Farm Payrolls data due at the end of the week.
The American stock market is in a strong long-term bullish trend, and it made a new all-time high price on Friday. The three major Forex pairs are all in long-term trends, and as I think the U.S. Dollar will probably advance this week, I select the only one in favor of the greenback: long USD/JPY.
