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 June 24
In my previous piece last week, I forecast that the best trades would be long USD/MXN and long USD/ZAR above the previous week’s highs. USD/MXN never broke the previous week’s high. USD/ZAR did but made a small loss, closing down from the previous week’s high price by 0.50%. I also forecast that long USD/CAD and short AUD/USD would be good trades. USD/CAD ended the week up by 0.58% while AUD/USD ended the week unchanged. This means that overall it was a neutral week for these forecasts, giving a tiny win of only 0.02%.
Last week saw a fall in the relative value of the U.S. Dollar and the commodity currencies, while safe haven assets such as the Japanese Yen and Swiss Franc gained. The Euro also rose.
The major event of last week was the policy input from the Bank of England, which had the effect of boosting the British Pound and the Euro toward the end of the week.
Fundamental Analysis & Market Sentiment
Fundamental analysis tends to support the U.S. Dollar, as American economic fundamentals continue to look strong. The weakest and most vulnerable currency is the Canadian Dollar, which is suffering not only due to U.S. tariffs but also due to poor Canadian economic data releases.
Emerging market currencies such as the Mexican Peso and South African Rand, which had been very weak, recovered quite sharply last week.
The week ahead will probably be dominated by the release of U.S. Final GDP data, although there is also monthly input from the Reserve Bank of New Zealand which could impact the Kiwi significantly.
