Forex Forecast: Pairs In Focus – Sunday, Sept. 9

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 Sept. 9

In my previous piece last week, I forecast that the best trades would be short AUD/USD, and bullish on the S&P 500 Index. These trades finished indifferently: while the AUD/USD fell by 1.21% the S&P 500 Index fell by 1.07%, producing an average win of only 0.07%.

Last week saw a rise in the relative value of the U.S. Dollar, and a fall in the relative value of the commodity currencies such as the Australian, New Zealand, and Canadian Dollars.

Last week’s Forex market was dominated by strong U.S. economic data at the end of the week, but also increased U.S. trade tariffs, and weakness in Asian stock markets both of which have hit commodity currencies.

Fundamental Analysis & Market Sentiment

Fundamental analysis tends to support the U.S. Dollar, as American economic fundamentals continue to look relatively strong. Sentiment seems to have given the Dollar a boost over the week, but trade war fears remain and continue to boost other safe havens such as the Swiss Franc and Japanese Yen periodically.

The week ahead is likely to be dominated by a slew of key British economic data, plus central bank input both there and in the Eurozone. There will also be a release of U.S. CPI (inflation) data. There is increasing speculation over the terms of a possible Brexit deal, as the British Government is keen to agree a deal with the European Union within the next few weeks if possible.