Forex Forecast: Pairs In Focus - Sunday, Dec.30

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 30, 2018

In my previous piece last week, I was long Gold/USD and USD/CAD and short of the S&P 500. This was a partially good call as Gold rose by 2.00%, USD/CAD rose by 0.32%, but the S&P 500 Index rose by 3.55%, so the forecast produced an averaged loss overall of 0.41%.

Last week saw a rise in the relative value of the Swiss Franc, and a fall in the relative value of the Australian Dollar.

Last week’s Forex market was quite noisy and was dominated by continuing weaknesses in crude oil, commodity currencies and a rise in safe havens including precious metals. The major index for the U.S. stock market, the S&P 500 Index, was briefly in bear market territory with a loss of more than 20% from its peak which was reached less than three months ago.

This week is likely to be dominated by what happens to the U.S. stock market, which seems likely to fall further, and this would suggest that the currencies and precious metals which performed strongly or weakly last week are likely to do so again this week.

Fundamental Analysis & Market Sentiment

Fundamental analysis seems to be increasingly turning against the U.S. Dollar, as the stock market dips into bear territory and the President excoriates the Federal Reserve for its recent rate hike. It is looking increasingly likely that the Federal Reserve will be too afraid to hike rates any further, and this is likely to weaken the U.S. Dollar. The U.S. will need more capital inflow and that is going to be difficult to achieve in the current environment. Dollar yields are very weak and the trade war with China has only been paused, not resolved.

1 2 3
View single page >> |

Disclosure: DailyForex will not be held liable for any loss or damage resulting from reliance on the information contained within this website including market news, analysis, trading signals ...

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.


Leave a comment to automatically be entered into our contest to win a free Echo Show.