The difference between success and failure in Forex / CFD trading is very likely to depend mostly upon which assets you choose to trade each week and in which direction, and not on the exact methods you might use to determine trade entries and exits.
So, when starting the week, it is a good idea to look at the big picture of what is developing in the market as a whole, and how such developments and affected by macro fundamentals, technical factors, and market sentiment. Read on to get my weekly analysis below.
Fundamental Analysis & Market Sentiment
I wrote in my previous piece on 14th August that the best trades for the week were likely to be:
- Looking for short-term long trades in the S&P 500 Index during periods of short-term bullish momentum. However, we did not really see any bullish momentum here last week.
The news is currently dominated by the FOMC meeting minutes which were released last week, showing that the Fed remains determined to continue hiking rates until inflation is brought considerably lower, and that Fed members are worried about the economic impact of the ongoing rate hikes. Recent inflation data released in the US and Canada showed inflation slowing, but inflation in the UK was revealed last week to be still increasing, now standing there at an annualized rate of 10.3%. The shift is sentiment is towards risk-off, which has had the effect of knocking down stocks, commodities, and cryptocurrencies, and strongly boosting the US Dollar, mostly at the expense of the commodity currencies NZD, AUD, and CAD.