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 April 22 

In my previous piece last week, I forecast that the best trades would be long GBP/USD and long WTI Crude Oil. After initially rising, GBP/USD fell sharply in the second half of last week and ended down by 1.57%, while WTI Crude Oil rose by 0.96%. This produced an average loss of 0.31% over the week.

Last week again saw a still-volatile stock market where the S&P 500 initially seemed to break above a key resistance level at 2674 before pulling back and closing below it, which might be a bearish sign. Crude Oil has continued to rise to new long-term high prices, making a new 3-year high. The Forex market was dominated by a relatively strong rise in the U.S. Dollar as 10-year yields barely made a new 4-year high.

There was little in the way of surprising economic data releases last week. There are no obvious drivers of sentiment except the U.S. yield situation, worries over the U.S./China Trade dispute, and tension over what will happen regarding the Iran deal as it comes up for renewal on  May 12.

Fundamental Analysis & Market Sentiment

Fundamental analysis tends to support the U.S. Dollar; and this seems to be increasingly supported by sentiment. Next week will bring a release of Advance U.S. GDP data which should be very important to the market, as well as central bank input concerning the Euro and the Japanese Yen.

Technical Analysis – U.S. Dollar Index