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.
- Sell DXY Trend – MT is bear normal. The downtrend in the USD resumed last week after the prior weeks NFP number beat. Data and Fed speak out of the US have not been supportive of the dollar. But the main driver of markets last week is the escalating tensions between North Korea and the US, along with the corresponding sell-off in equities. While the chance of war is slim, markets have been positioning for risk-off, and there has been no efforts at easing the conflict by either side heading into the weekend. Continue to sell.
- Wait GBP/USD. – MT is sideways normal. We are trading just above the key 1.30 level. There is not much to note in terms of data and we can look for Tuesdays inflation report to give some direction on whether we will see a 2018 rate hike or now. Given the recently dovish bent of the BOE, pressure remain to the downside.
- Sell USD/JPY. Trend – MT is bear normal. The bear market type persists on the bank of geopolitical tensions. Note we have taken out support and a small doji candle has formed. A bullish day on Monday could see the start of a shift to a sideways MT or even a reversal if the tensions die down.
- Wait AUD/USD. – MT is sideways normal. A bullish engulfing day off support on Friday could lead to some upside but the pattern looks relatively weak. The RBA has been unsupportive of the AUD telling market participants they are in no hurry to hike rates. The broad risk-off flows should continue to see the AUD under pressure too. Wait for now.
- Buy EUR/USD. Trend – MT is bull normal. The bull MT continue with little data last week to reverse the trend. The EUR has also been the benefit of risk-off flows in recent times and this relationship seems to be holding for now. This week watch for ECB minutes on Thursday to provide more guidance on the ECB’s recently hawkish path.
- Wait NZD/USD. – MT is sideways volatile. The prior weeks bearish engulfing week played out the pair sold heavily off the key .7500 level. Importantly, the RBNZ talked about intervention and changed their language to concern about the high value of the NZD. Data in NZ has not been good either. We can expect the sell off to continue. Watch for the dairy auction on Tuesday.
- Wait USD/CHF. – MT is sideways volatile. USDCHF has sold off on the back of geopolitical tensions and is now sitting mid range. A further sell-off can be expected.
- Wait USD/CAD. – MT is sideways normal. We may now be flipping into a sideways market type after bouncing off key support at 1.25. Neither oil nor data are providing any real direction. Wait for now.
- Buy EUR/GBP. Trend – MT is bull normal. The pair continues to rise and we can keep our eyes fixed on the 0.92 target.
Crosses
- Buy EUR/CHF. Trend – MT is bull normal. A bullish engulfing candle suggests buy, although it can be a bit risky after such a fast bull market.
- Sell AUD/JPY. Trend – MT is bear fast. Continue to sell but be wary of Friday’s bullish hammer – don’t give back too much more if short already.
- Sell NZD/JPY. Trend – MT is bear fast. Continue to sell.
- Sell GBP/JPY. Trend – MT is bear fast. Continue to sell.
- Wait EUR/JPY. – MT is sideways normal. Wait.
- Sell CAD/JPY. Trend – MT is bear normal. Continue to sell.
- Sell CHF/JPY. Trend – MT is bear normal. Continue to sell.
- Wait GBP/NZD. – MT is sideways normal. Wait.
- Buy EUR/NZD. Trend – MT is bull normal. Continue to buy.
- Buy AUD/NZD. Trend – MT is bull normal. Continue to buy, but watch for a shift to a sideways MT here.
- Wait EUR/AUD. – MT is sideways volatile. Wait.
- Sell GBP/AUD. Trend – MT is bear normal. Continue to sell, almost sideways MT though.
- Wait AUD/CAD. – MT is sideways volatile. Wait.
- Wait GBP/CAD. – MT is sideways normal. Wait.
- Buy EUR/CAD. Trend – MT is bull normal. Continue to buy.
- Wait NZD/CAD. – MT is sideways normal. Wait.
- Wait GBP/CHF. – MT is sideways volatile. Wait.
- Wait CAD/CHF. – MT is sideways volatile. Wait.
- Wait NZD/CHF. – MT is sideways volatile. Wait.
- Wait AUD/CHF. – MT is sideways volatile. Wait.
Other Markets
- Buy Gold. Trend – MT is bull normal. Continue to buy.
- Buy Oil. Trend – MT is bull normal. Continue to buy.
- Sell S&P 500. Trend – MT is bear normal. Look to sell.
- Sell DAX. Trend – MT is bear normal . Continue to sell.
- Buy T-Notes Trend – MT is bull normal. Look to buy.
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Economic calendar for the week ahead:
(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.