Forex Trading Opportunities for the Week Ahead 12 December 2016

I plan my trading for the week ahead each weekend. Here are the Forex trading opportunities I will be stalking this week.

Note that this is my current view, but if market conditions change my view can change too. Generally I will trade in alignment with what I have noted here, though I will wait for a set-up before I enter. I base my view on technical and fundamental information. This is my beliefs and you are welcome to have opposite ones. Having a plan is more important than the actual direction for me. 

• Buy DXY  Trend – MT is bull normal. The USD sold off initially last week, but the key 100 level held and the dollar finished strong on the back of rising bond yields and a dovish ECB. Of course, the main event this week is the rate hike from the Fed, which seems to be a done deal. Market participants will listen eagerly to Yellen’s testimony for an indication of how many more hikes we are likely to see next year.

• Buy GBP/USD. – MT is bull normal. We are just holding onto the bull normal MT in the GBP. The main event next week is the BOE’s Super Thursday rates announcement, but this is preceded by a slew of potentially market moving data. If data surprises to the upside and/or the BOE is in any way hawkish we can expect the pound to push higher. I continue to prefer to buy the GBP vs. crosses rather than the USD.

• Buy USD/JPY. Trend – MT is bull normal. The yen continues to march higher, keep buying but be sure to protect profits ahead of the Federal Reserves rates announcement as any profit taking could lead to a sharp sell-off.

• Wait AUD/USD. –  MT is sideways normal. The Aussie had a big data miss last week with quarterly GDP figures falling 0.5% alongside a ballooning trade deficit. The weekly MT remains bearish, with only rising stocks and commodity prices holding up the fall in the pair. I prefer to look for shorting opportunities near the top of the range.

• Wait EUR/USD.  –  MT is sideways normal. It was a volatile week in the EUR with the pair selling off on the back of the Italian referendum before bouncing off key support at 1.05. The rally was sharp but short after the ECB’s dovish stance lead to renewed selling the pair. We have turned sideways but I still like to sell. Look for a break below 1.0470 for a resumption of the daily bear market type.

• Wait NZD/USD. – MT is sideways normal. The bullish momentum off the key .70 level is running out of steam here. Last week John Key, NZ’s ponytail tugging prime minister stepped down citing family reasons. The accompanying sell-off was relatively minor and the kiwi eventually pushed higher. At the end of the week the pair failed to maintain it’s upward trajectory in the face of USD strength. Of note dairy prices rose again and are now 80% off the low. Wait for now and see how things play out ahead of this weeks Fed rate announcement.

• Wait USD/CHF.  – MT is sideways normal. The pair has flipped sideways. This week we have the SNB rates announcement where nothing interesting is expected.

• Sell USD/CAD.  Trend – MT is bear normal. Oil is up and the BOC remains neutral. Expect the sell-off to continue for now, but note that we are still in a weekly bull MT.

• Wait EUR/GBP. – MT is sideways normal.  After taking out the .8330 key level we have now turned into a sideways MT. I still like to sell the pair which you could do on a break of .8280 or if you want to be aggressive you could sell here at market.

Crosses

• Wait EUR/CHF.  – MT is sideways normal. Wait for now, though prefer the downside.
• Buy AUD/JPY. Trend – MT is bull normal. Continue to buy.
• Buy NZD/JPY. Trend – MT is bull normal. Continue to buy.
• Buy GBP/JPY.  Trend – MT is bull normal. Continue to buy.
• Wait EUR/JPY. – MT is bull normal. The minor double stop and Thursday’s outside day should give long’s pause.
• Buy CAD/JPY. Trend – MT is bull normal. Continue to buy.
• Buy CHF/JPY.  Trend – MT is bull normal. Continue to buy.
• Wait. GBP/NZD. – MT is sideways quiet. Wait.
• Sell EUR/NZD. Trend – MT is bear normal. Continue to sell.
• Wait AUD/NZD. – MT is sideways normal. Wait.
• Wait EUR/AUD. – MT is sideways normal. Wait.
• Wait GBP/AUD. – MT is sideways normal. Wait.
• Sell AUD/CAD. Trend–  MT is bear normal. Continue to sell.
• Wait GBP/CAD. –  MT is sideways normal. Wait.
• Sell EUR/CAD. –  MT is bear normal. Continue to sell.
• Wait NZD/CAD.  – MT is sideways normal. Wait.
• Wait GBP/CHF. – MT is sideways normal
• Sell CAD/CHF. Reversal – MT is bull normal. Brave contrarian sell off weekly resistance, very good risk/reward but low probability. Could go well if Oil fails to hold the $50 mark this week.

• Wait NZD/CHF. – MT is sideways volatile. Wait.
• Sell AUD/CHF. Reversal – MT is sideways normal. Look to sell after a busted breakout and bearish hammer.

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(MT = Market Type: Click for more information on market types.)

Trend: Market is trending in the direction I have listed and I expect it to continue. 

Reversal: I am looking for a reversal against the current trend.

Breakout: The currency pair is breaking out of a range. 

About the Author

Sam Eder is a currency trader and author of the Definitive Guide to Developing a Winning Forex Trading System and the Advanced Forex Course for Smart Traders (get free access). He is the owner of  www.fxrenew.com a provider of Forex signals from ex-bank and hedge fund traders (get a free trial). If you like Sam’s writing you can subscribe to his newsletter.

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