Forex Forecast: Pairs In Focus – Sunday, Jan. 22

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 22nd January 2017

Last week, I predicted that the best trades for this week were likely to be short British Pound against the U.S., Australian and New Zealand Dollars. All these currencies rose during the week, but the British Pound rose the most of all, so the trade overall was not successful. The average result was a loss of 1.04%.

The Forex market seems to be moving into a less predictable mode now, with the well-established bullish trend in the USD since 8th November being called into question, yet still being technically intact.

The Euro and Swiss Franc are currently showing short-term bullishness, as is the British Pound. I therefore suggest that the best trade this week is likely to be short of the Japanese Yen and long of the U.S. Dollar.

Fundamental Analysis & Market Sentiment

The major development making waves in the market right now is President Trump’s assumption of office, and his remark that the U.S. Dollar is “too strong”. He gave a dark and unusual inauguration speech, in which he seemed to strongly emphasize a nationalistic and protectionist economic policy. The effects of this are unclear but it seems to have taken the shine off the U.S. Dollar temporarily at least.

The other major issue is the British government’s confirmation that it will pursue a Hard Brexit yet allow Parliament a vote on the approval of any final deal. Paradoxically, this has had the effect of strengthening the Pound significantly.

Print Friendly, PDF & Email

Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

Share This Post On

Submit a Comment

Your email address will not be published. Required fields are marked *