Saturday , May 8 2021

Forex Forecast: Pair in Focus



The difference between success and failure in Forex trading is very likely depending on which currency pair you choose to trade every week, and not on the right trading method that you might use to determine your entry and exit trades. Every week I will analyze fundamentals, sentiments and technical positions to determine which currency pairs are most likely to produce the easiest and most profitable trading opportunities during the next week. In some cases, this will trade trends. In other cases, this will be trade support and resistance levels as long as more markets start.

Large image 18th November 2018

In my previous section last week, I estimate that the best trade will be short of EUR / USD and Gold and long USD / CAD. Unfortunately, this is all losing trade. EUR / USD rose 0.71%, USD / CAD rose 0.47%, and Gold rose 1.05%, giving an average loss of 0.74%.

Last week saw a rise in the relative value of the New Zealand Dollar, and a decrease in the relative value of the British Pound.

Last week's Forex market was dominated by news that the British government had approved a draft Brexit agreement and ongoing uncertainty over whether the agreement could secure the approval of the British Parliament. It seems that the Pound will fluctuate as long as uncertainty over the Brexit outcome continues.

New Zealand's economic data was very positive, as well as the release of a slightly hawkish FOMC that pushed the US Dollar. Bullish USD trend still holds.

This week is likely to be dominated by upcoming Australian and Canadian data, as well as British political instability.

Fundamental Analysis & Market Sentiment

Fundamental analysis still tends to support the US Dollar, because American economic fundamentals continue to look strong. Sentiment still seems to support the US Dollar because even though the recent selloff is quite strong in the stock market, economic fundamentals are still widely seen as good, although there is now increasing confidence that the Federal Reserve should delay rising interest rates to over-cooling the economy : some economists now argue that US growth has cooled. Fundamentals remain bearish on the Japanese Yen, but these currencies can still benefit from safe-haven "risk off" cash flows.

Next week the market will likely be dominated by the British Pound, and New Zealand and the Australian Dollar.

Technical Analysis

US Dollar Index

The weekly price chart below shows that after last week's bullish candlestick, this week scored a bearish candlestick with the upper axis pronounced rejecting the resistance level at 12291. Prices remain in multi-week consolidation between support and resistance and I don't have strong self-confidence. for the short-term direction, even though the edge is technically still in line with the long-term bullish trend, which remains intact. However, it seems likely that the long-term bullish trend may eventually end, if not a reversal.

USDX

NZD / USD

The weekly chart below this week shows a very strong bullish candlestick with above-average volatility closed right by the top of the range. This is a continuation of the healthy increase we have seen over the past few weeks and brings prices to their highest close in more than 20 weeks. These are bullish signs and the NZD is currently the strongest of all major global currencies.

NZDUSD

AUD / USD

The weekly chart below this week shows a very strong bullish candlestick with above-average volatility closed right by the top of the range. This is a continuation of the healthy increase we have seen over the past few weeks and brought prices to their highest close in 15 weeks. These are bullish signs but it should be noted that NZD is currently the strongest of all major global currencies, so the long NZD / USD has a higher probability of this.

AUDUSD

Conclusion

Bullish on the NZD / USD currency pair and AUD / USD.


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