Forex Trading Opportunities for the Week Ahead 13 August 18: FXRenew

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

• Wait DXY. Trend – MT is bull normal. Last week we broke out into a bull MT and have cleared the key 95.50 resistance level. There are three key drivers of the move. Firstly, divergence in monetary policy and economic performance favors the USD. Secondly, the trade spat with China, though its impact on direction is less clear to me. Thirdly, there is an escalating situation in Turkey, when European banks have contagion risk that is driving safe haven flows to the USD. Continue to buy.

• Sell GBP/USD. Trend – MT is bear normal. GBP is impacted by the strong dollar. There are growing concerns that a Brexit deal will not be done within the seven month timeline and this is pressuring the pair. It’s an important week for UK data with retail sales, inflation and employment upcoming. Keep selling.

• Wait USD/JPY. – MT is sideways normal. The pair is benefiting from risk-off flows both with regards to the China/US trade spat and the Turkey situation. Risk-off is winning over monetary policy divergence at this point in time and we remain range bound. Wait for now.

• Sell AUD/USD. Breakout–  MT is bear normal. We have rejected the top of the recent range and broken out into a bear market type. This is despite a relatively upbeat RBA (who may well start to sing a different tune soon). The move was on the back of a sell-off in NZD and then on risk-off flows regarding Turkey. A slow down in China, considering the trade tariffs, weighs on the pair too. This is a high conviction breakout and I look for a move at least toward 0.7150.

• Sell EUR/USD. Trend –  MT is bear normal. The bear MT continues to play out with a break of the key 1.15 level. The catalyst to the break of this level is fears of European bank exposure to the ongoing problems in Turkey. Note, I think EURGBP selling may also support the sell-off in the pair, given the levels it is at. Continue to sell, also high conviction.

• Sell NZD/USD. Trend –  MT is sideways quiet. After a raft of poor data, the RBNZ hit a decidedly dovish tone in last weeks meeting. This has seen the Kiwi fall through the floor and a move back to 0.64 seems imminent, in particular considering the drivers on the USD side of the trade. Look to sell.

• Wait USD/CHF.  – MT sideways quiet. The Swissie, like the Yen remains range bound, with risk-off flows supporting the currency. Wait for now.

• Wait USD/CAD. – MT is sideways normal. The pair has moved back into a sideways MT. The Canadian dollar is being driven by the USD move. Otherwise, other drivers remain supportive of the currency. Employment data was good on Friday and Oil, while volatile has not greatly extended the sell-off. Wait for now.

• Wait EUR/GBP. – MT is bull normal. There is a busted breakout and bearish weekly hammer off the key 0.90 level. If UK data surprises to the upside then selling this pair could be a decent play.

Crosses

• Sell EUR/CHF. Trend – MT is bear normal. Continue to sell.
• Sell AUD/JPY.  Trend – MT is bear normal. Look to sell.
• Sell NZD/JPY. Trend– MT is bear normal. Continue to sell.
• Sell GBP/JPY. Trend – MT is bear normal. Continue to sell.
• Sell EUR/JPY. Trend– MT is bear normal. Continue to sell.
• Sell CAD/JPY.  Trend – MT is bear normal. Look to sell.
• Wait CHF/JPY. – MT is sideways quiet. Wait.
• Wait GBP/NZD.  – MT is sideways normal. Wait.
• Wait EUR/NZD. – MT is bull volatile. Also at resistance. Wait.
• Buy AUD/NZD. Trend – MT is bull normal. Continue to buy.
• Sell EUR/AUD. Breakout– MT is bear normal. Continue to sell.
• Sell GBP/AUD. Trend – MT is bear normal. Continue to sell.
• Sell AUD/CAD. Trend – MT is bear normal. Continue to sell.
• Sell GBP/CAD. Trend –  MT is bear normal. Continue to sell.
• Sell EUR/CAD. Trend – MT is bear normal. Continue to sell.
• Sell NZD/CAD. Trend  – MT is bear normal. Continue to sell.
• Sell GBP/CHF. Trend – MT is bear normal. Continue to sell.
• Wait CAD/CHF. – MT is sideways normal. Wait.
• Sell NZD/CHF.  Trend – MT is bear normal. Continue to sell.
• Sell AUD/CHF.  Trend – MT is bear normal. Look to sell.

Other Markets

• Buy USDSGD. Breakout – MT is bull normal. Look to buy.
• Buy USDCNH. Trend – MT is bull normal. Continue to buy.
• Sell Gold. Trend – MT is bear normal.  Continue to sell.
• Wait Oil. – MT is sideways normal. Wait.
• Buy S&P 500. Trend – MT is bull normal. Continue to buy.
• Sell DAX. Breakout – MT is bear normal. Look to sell.
• Sell Nikkei. Breakout – MT is bear normal. Look to sell.
• Sell T-Notes. Trend – MT is bear normal. Continue to sell.

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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.