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 18th September 2016

Last week I predicted that the best trades for this week were likely to be short GBP/USD and USD/JPY. Both of these trades were winners this week, especially short GBP/USD, producing an averaged return of 1.20%.

The market is easier to forecast at the moment as one of the strongest long-term trends appears to be moving again – GBP/USD – while USD/JPY is perhaps looking flatter, but is still currently moving in trend.

This week I again suggest that the best trades are likely to be short USD/JPY and GBP/USD, both in line with long-term multi-month trends.

Fundamental analysis is of little use at the moment although better-than-expected U.S. economic data released on Friday boosted the greenback. The market is being driven mostly be sentiment which see-saws with contradictory statements from FOMC members regarding the prospect of a U.S. rate hike. However, this week the FOMC are finally going to have to put their money where their collective mouth is, so to speak, when they announce whether or not they are hiking rates on Wednesday. I doubt there will be a rate hike, which suggests that short USD/JPY is likely to be the most productive trade this week.

The British Pound has been falling on the back of a worse than expected British economic data release.

Elsewhere, sentiment factors remain the key drivers.