Get the Forex forecast using the fundamental, sentiment and technical position analysis for the major pairs for the week of June 6, 2021 here.
The difference between success and failure in Forex trading will most likely depend primarily on which currency pairs you choose to trade each week and in which direction, and not on the exact trading methods you might use to determine entries and entries. trading exits.
At the start of the trading week, it is a good idea to get an overview of what is developing in the market as a whole and how these developments are affected by macroeconomic fundamentals and market sentiment. market.
Now is not a particularly good time to trade the markets right now, as there are only a few valid long-term trends to exploit.
Large image 6e June 2021
The Forex market last week saw the biggest rise in the relative value of the Australian dollar and the biggest drop in the relative value of the New Zealand dollar. However, the values ââwere so low that they were virtually unimportant. It has been a quiet week in the Forex market.
I wrote in my previous post last week that the best trades were likely to be short on USD / CAD and USD / ZAR currency pairs, and long on gold in terms of USD. The USD / CAD currency pair rose 0.02%, while the USD / ZAR currency pair fell 2.64%. Gold in USD fell 0.63% on the week. Overall, these are good calls as they produced an average gain of 0.67%.
Fundamental analysis and market sentiment
The headline to remember from last week was the Weaker Than Expected Non-Farm Payrolls Report in the United States. This pushed the US dollar down slightly, while pushing WTI crude oil to a new long-term high and the main S&P 500 index very close to a new all-time high. We see a mixed picture in other markets, with fewer clear trends surviving. The Canadian dollar and the British pound have the greatest long-term strength among the major currencies.
Last week, new jobs in the US and Canada fell short of expectations, while Australia’s GDP turned out to be growing faster than expected.
The main events for the coming week will be the main monthly political contributions from the European Central Bank and the Bank of Canada, as well as key data from the US CPI (inflation). These releases should ensure that the coming week will be more volatile than last week.
Last week, the global number of new confirmed coronavirus cases and deaths fell for the fifth week in a row, suggesting that the recent wave that set a new daily record has peaked around the world. It is likely that the large vaccination campaigns observed mainly in more advanced economies have contributed significantly to this situation.
With the exception of extremely small countries, the fastest progress towards herd immunity has been in Israel, the United Kingdom and the United Arab Emirates Vaccination now proceeds faster in the European Union than in states United, although the US is ahead of the EU with 51% of its population having received at least one vaccine injection, while the EU has vaccinated 40% of its population. Some countries are about to start immunizing older children.
The strongest growth of new confirmed cases of coronavirus is currently occurring in Afghanistan, Algeria, Bangladesh, Cambodia, Colombia, Dominican Republic, Fiji, Haiti, Kuwait, Malaysia, Mongolia, Oman, Philippines, South Africa, Sri Lanka, Tunisia and Vietnam.
US dollar index
The weekly price chart below shows that the US dollar index printed a bearish pin / doji candlestick last week. This is a bearish sign, as is the fact that the price action is still respecting the resistance level identified at 11716. The index is still below its prices of six and three months ago, showing that a long-term downtrend persists in the greenback. Overall, the price movement of the US dollar next week seems more likely to be downward than upward. Much will likely depend on maintaining the resistance level at 11716. This suggests that short trading in the USD will likely be appropriate next week.
USD / CAD
While the Canadian dollar does not have a good track record of sticking to its own price dynamics, the chart below shows that we have seen a firm and persistent long-term uptrend in the loonie since the initial shock recovery. coronavirus prices for March 2020. Despite the strong long-term downtrend, bears should be wary of the large round number at 1.2000, which was nearly hit last week. Bears should also be careful that last week’s price range was very narrow, so it will probably be worth waiting for the price to settle below the low and large round number at 1.2000 before trying to enter short positions.
USD / TRIAL
For years, the Turkish lira has suffered from an established hopelessness status of a constantly weakening currency, as markets have little confidence in the ability of the Turkish central bank to function effectively. Last week, the currency hit a new all-time low before this currency pair ended the week at a record weekly close.
This currency pair is a tempting target, but spreads and overnight funding costs are high and therefore should only be traded with caution. The price is also often subject to strong bearish retracements which occur very suddenly. Traders looking to miss the Turkish lira need to be extremely careful and choose their timing precisely.
USD / ZAR
While the South African Rand does not have a good track record of sticking to its own price dynamics, the chart below shows that we have seen a firm and persistent long-term uptrend in the Rand since its initial rally. of the coronavirus price shock of March 2020. There is a strong long term downtrend, with healthy bearish momentum over the past week pushing the price to a new 2 year low again. The price of this currency pair is expected to decline further over the coming week.
WTI crude oil
While WTI Crude Oil does not have a good track record of sticking to its own price dynamics, the chart below shows that we have seen a firm and persistent long-term uptrend in Crude Oil since the initial rally. of the coronavirus price collapse seen in April. 2020. Despite the strong long-term uptrend, bulls should be wary of the large round number at $ 70, which was nearly hit last week. however, continued strong post-corona economic growth in many major economies is fueling demand for WTI crude oil, so could be an attractive buy again in the coming week.
I see the best likely opportunities in the financial markets this week as being short of the USD / CAD currency pair following a daily close (New York) below 1.2000, and the USD / ZAR currency pair.