Forex Forecast: Pairs In Focus - Sunday, November 17

The British Pound remains quite firm as the governing Conservative Party seems to be heading for a clear victory, which should ensure that Brexit happens in line with the government’s wishes at the end of January. This enhanced certainty is likely to boost the Pound.

Technical Analysis

U.S. Dollar Index

The weekly price chart below shows last week printed a small bearish candlestick, which clearly rejected the resistance level at 12355, and closed right at the bottom of its price range. The price is below its level from three months ago, and below its level from six months ago as well as the resistance level. This suggests that next week’s action is more likely to be bearish than bullish.

USD index

S&P 500 Index

The weekly price chart below shows last week printed a bullish candlestick, which closed very near its high at an all-time high price. These are bullish signs, suggesting that the price is likely to rise further over the course of the coming week. Research shows that over the last 50 years, similar closes have indicated a further weekly rise on just under 53% of occasions. However, all-time highs can be prone to sharp selloffs, so it is best to trade long using relatively tight stop losses, and to be guided by shorter-term time frames.

SP 500

Conclusion

This week I forecast the best trades are likely to be buying any relatively shallow dips in the S&P 500 Index, using tight stop losses. The Forex market is ranging everywhere so I see no appropriate trade set ups in Forex this week.

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