Forex Forecast: Pairs In Focus - Sunday, June 6

10 and one 10 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 not an especially good time to be trading markets right now, as there are only a few valid long-term trends to exploit.

Big Picture June 6

Last week’s Forex market saw the strongest rise in the relative value of the Australian dollar and the strongest fall in the relative value of the New Zealand dollar. However, the values were so small as to be practically irrelevant. It was a quiet week in the Forex market.

I wrote in my previous piece last week that the best trades were likely to be being short of the USD/CAD and USD/ZAR currency pairs, and long of gold in USD terms. The USD/CAD currency pair rose by 0.02%, while the USD/ZAR currency pair fell by 2.64%. Gold in USD terms fell by 0.63% over the week. Overall, these were good calls, as they produced an averaged win of 0.67%.

Fundamental Analysis & Market Sentiment

The headline takeaway from last week was the weaker than expected non-farm payrolls report in the US. This sent the U.S. dollar somewhat lower, while pushing WTI Crude Oil to a new long-term high and the major S&P 500 Index very near to a new all-time high price. We are seeing a mixed picture across other markets, with fewer clear trends surviving. The Canadian dollar and the British pound have the greatest long-term strength amongst major currencies.

Last week saw the new U.S. and Canadian job prints come in lower than expected, while Australian GDP was revealed to be growing faster than expected.

The main events this coming week will be major monthly policy inputs from the European Central Bank and the Bank of Canada, plus key U.S. CPI (inflation) data. These releases are likely to ensure that the coming week is more volatile than last week was.

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