Forex Forecast: Pairs In Focus - Sunday, Dec. 2

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 December 2, 2018

In my previous piece last week, I forecast that the best trade would be short of the EUR/USD currency pair. The price fell by a small amount, giving a win of 0.16%.
Last week saw a rise in the relative value of the Australian and New Zealand Dollars, and a fall in the relative value of the Japanese Yen and the Canadian Dollar. 
Last week’s Forex market was relatively quiet, with the U.S. Dollar losing some ground upon a dovish signal from the Federal Reserve but recovering it quickly. This week is likely to be dominated by crucial U.S. Non-Farm Payrolls data and testimony before Congress by the Chair of the Federal Reserve.

Fundamental Analysis & Market Sentiment

Fundamental analysis still tends to support the U.S. Dollar, as American economic fundamentals continue to look strong, although there are increasing fears that further rate hikes will have a more strongly negative impact. However, it now seems that the path of hikes in the near term will be slowed, which support sentiment and fundamentals on the U.S. economy. Sentiment seems to be still in favor of the U.S. Dollar as despite quite strong recent selloffs in the stock market, the economic fundamentals are still widely seen as good. Fundamentals remain bearish on the Japanese Yen, but this currency can still benefit occasionally from safe-haven “risk off” money flow.

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