Forex Forecast: Pairs at a Glance

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Get the Forex forecast using the fundamental, sentiment and technical position analysis for the major pairs for the week of September 20, 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 what direction, and not on the exact trading methods you might use to determine entries and entries. trading exits.

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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. Marlet.

There are some strong valid long and short term tendencies in the market right now, so now is a good time to trade to take advantage of it.

Big picture 19e September 2021

The Forex market over the past week has broadly returned in line with the dominant long-term trends, but overall price movement has been relatively weak. Commodity currencies such as the AUD and CAD, as well as the Swiss franc, fell while the USD and JPY rose. Almost all of the world’s stock markets sold during the week.

I wrote in my previous post last week that the best trade was probably short of the AUD / USD currency pair taking a swing trading style. It was a good call as the AUD / USD currency pair fell 1.18% during the week.

Fundamental analysis and market sentiment

The main finding over the past week was a continued sour appetite for risk that manifested itself in declines in most stock markets and commodity currencies and increases in the USD and the JPY. The sense of risk was probably primarily driven by fears that the United States is failing to truly bring the coronavirus under control and that the consequences of this threaten economic growth to some extent. However, positive economic data was released last week, showing slowing US inflation and increasing retail sales, while UK and Canadian inflation data is slightly above expectations.

This week will be dominated by monthly policy statements from the central banks of the United States, United Kingdom, Japan and Switzerland, as well as reports from the Reserve Bank of Australia’s monetary policy meetings. This means that the Forex market is likely to be very active and volatile this week.

Last week, the global number of new confirmed coronavirus cases fell for the fourth week in a row after increasing for more than two months, although deaths increased last week compared to the previous week. About 42.9% of the world’s population has now received at least one vaccine. The United States appears likely to approve Pfizer’s booster shots only for the over 65 age group.

It seems to be becoming clear that due to the widespread variant of Delta, which studies are starting to show can be as easily transmitted as chickenpox, the only way to stop the natural spread of the disease is through “immunity. collective ”would be for more than 95%. of an entire population to be fully vaccinated. There are also increasing indications that the effectiveness of vaccines decreases considerably after approximately five months have passed since the last administration. These factors even make local eradication of the coronavirus extremely difficult to achieve.

The strongest growth of new confirmed cases of coronavirus is currently occurring in Albania, Armenia, Australia, Austria, Barbados, Belarus, Bosnia, Cambodia, Croatia, Egypt, Estonia, Israel, Latvia, Lithuania, Moldova, Montenegro, Philippines, Romania, Serbia, Singapore, Slovenia and Ukraine.

Technical analysis

US dollar index

The weekly price chart below shows the US Dollar Index printed a bullish candlestick last week which again rejected the support area I identified between 11899 and 11833. The price is still above the levels from 3 and 6 months ago, showing that the greenback’s long-term uptrend is still valid. We also have bullish momentum illustrated by the fact that the weekly candlestick closed at the very top of its range. This suggests that USD trades look better on the long side than the short side right now, so the best strategy in the Forex market over the coming week is likely to be to look for long trades in US dollar currency pairs.

Weekly chart of the US dollar index

AUD / USD

AUD / USD currency pair fell sharply last week, printing a bearish candlestick that closed just low. This currency pair has the highest medium-term volatility in the Forex market right now. This was a move in line with the long-term downtrend, as evidenced by the price being below its levels of three and six months ago. As market sentiment shifted away from risk and the AUD became a key currency in the risk barometer, there could be another good short trade opportunity here over the coming week. Waiting for the market to close on Monday and then trading any breach of Monday’s short range might be a good approach here.

AUD / USD weekly chart

USD / CHF

The USD / CHF currency pair has risen sharply in the last two days of last week, printing a bullish weekly candlestick that closed high. This currency pair has stood out in recent days by hitting a new high long-term price. There could be another good short trade opportunity here over the coming week, but traders should be at least a little cautious as this currency pair does not tend to trade. Looking for long trades after low drawdowns on the short-term price charts could be a great strategy for trading this currency pair, at least early in the coming week.

USD / CHF weekly chart

Final result

I see the best opportunity in the financial markets this week like likely to be in swing trades on the AUD / USD currency pair, on the short side, and daily short-term long trades on the USD / CHF currency pair.


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