Forex Forecast: Pairs In Focus - Sunday, April 25

10 and 20 us dollar bill

The difference between success and failure in Forex trading is very likely to depend mostly upon which currency pairs you choose to trade each week and in which direction, and not on the exact trading methods you might use to determine trade entries and exits.

When starting the trading week, it is a good idea to look at the big picture of what is developing in the market as a whole and how such developments and affected by macro fundamentals and market sentiment.

It is a good time to be trading markets right now, as there are a few valid long-term bullish trends in major U.S. and European stock market indices, which can be traded at most Forex brokers as CFDs, as well as medium-term momentum in favor of the euro and the Japanese yen and against the U.S. dollar.

Big Picture April 25

Last week’s Forex market saw the strongest rise in the relative values of the euro and the strongest fall in the relative value of the U.S. dollar.

I wrote in my previous piece last week that the best trades were likely to be long of the S&P 500 and Dax 30 Indices. While the S&P 500 Index ended the week virtually unchanged, the Dax 30 Index closed down by 1.54%, giving an average loss of 0.77%.

Fundamental Analysis & Market Sentiment

The headline takeaway from last week is that market sentiment remains risk-on, especially on the U.S. and the Eurozone centered on Germany. Demand has been stoked by dovish monetary policies plus stimulus in the U.S., despite fears that policy will lead to untenable inflationary pressures and of higher corporate taxes. The major U.S. stock index, the S&P 500, briefly traded at a new all-time high price on Friday.

The U.S. dollar fell again over the past week after running into technical resistance three weeks ago, while its long-term trend is mixed. There is medium-term momentum against the dollar while there is similar bullish momentum in favor of the euro and to a lesser extent the Japanese yen. We also see long-term strength in the Canadian dollar, which is backed by fundamental factors and the policies of the Bank of Canada.

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