Forex Trading Opportunities for the Week Ahead 15 Jan 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. 

• Sell DXY. Trend – MT is sideways normal. Despite the prospect of a number of rate hikes in 2018, rising bond yields, tax reform and a relatively hawkish Fed, the USD continues the fall it began at the beginning of 2017. Importantly, we are now trading below the key 92 resistance level and the through the September low. If we do get a strong reversal from here it could lead to significant upside, but until we do, shorting is the correct strategy.

• Buy GBP/USD. Trend – MT is bull normal. There is more optimism around about the prospects of a soft Brexit, which, along with rising GILT yields and USD negative sentiment, is driving the pair to new recent highs. Continue to buy.

• Sell USD/JPY.  Trend – MT is bear normal. While in practice it is nothing major, the market has latched onto a reduction in bond purchases by the BOJ. This combined with negative USD sentiment has pushed the currency into a bear market type. Look to sell.

• Buy AUD/USD. Trend –  MT is bull normal. Positive data, global risk-on and general USD weakness has seen the AUD rise consistently this year. We can look for a move back towards .80 then .81 where there is major resistance.

• Buy EUR/USD. Trend –  MT is bull normal. The EURO is the story of the week, with hawkish ECB minutes driving the pair to the highest level since 2015 on expectations of ECB tightening in 2018. This strong move happened despite decent US data. When data is ignored like this it is quite a bullish sign. But we do need to be careful as we have not yet fully cleared the major resistance around 1.20-21. If there is a strong reversal here and we trade back below 1.20 then it could be a sign we are in for a period of USD strength.

• Buy NZD/USD. Trend –  MT is bull normal. The kiwi has bounced off key support at 0.68 and a strong bull MT is in place. We can look for a move back towards 0.75. This has been on the back of improving commodity prices, global risk on, and USD weakness. Continue to buy, but watch for the dairy auction this week.

• Sell USD/CHF. Trend – MT is bear normal. The CHF has been one of the weakest currencies across the board, but has gained against the USD in sympathy with the EUR. Look for a move towards 0.95.

• Sell USD/CAD. – MT is bear normal. Despite concerns about NAFTA, the prospect of an upcoming rate hike and general USD weakness has seen the bear trend resume. Continue to sell.

• Wait EUR/GBP.  – MT is sideways normal. Despite positive Brexit sentiment, the pair remains range bound. Wait for now.

Crosses

• Buy EUR/CHF. Trend – MT is bull normal. Continue to buy.
• Buy AUD/JPY. Trend – MT is bull normal. Continue to buy.
• Buy NZD/JPY. Trend – MT is bull normal. Continue to buy.
• Wait GBP/JPY.  – MT is sideways normal. Wait.
• Wait EUR/JPY. – MT is sideways normal. Wait.
• Wait CAD/JPY.  – MT is bull volatile. Wait.
• Wait CHF/JPY.  – MT is sideways normal. Wait
• Sell GBP/NZD.  Trend – MT is bear normal. Continue to sell will caution.
• Sell EUR/NZD. Trend – MT is bear normal. Continue to sell will caution.
• Wait AUD/NZD. – MT is sideways normal. Wait.
• Wait EUR/AUD. – MT is sideways normal. Wait.
• Wait GBP/AUD.  – MT is bear volatile. Wait.
• Wait AUD/CAD. –  MT is sideways normal. Wait.
• Wait GBP/CAD. – MT is bear volatile. Wait.
• Wait EUR/CAD.  –  MT is sideways normal. Wait.
• Wait NZD/CAD.  – MT is sideways normal. Wait.
• Wait GBP/CHF. – MT is sideways quiet. Wait.
• Wait CAD/CHF. – MT is sideways volatile. Wait.
• Buy NZD/CHF. Trend – MT is bull normal. Continue to buy.
• Buy AUD/CHF.  Trend – MT is bull normal. Continue to buy.

Other Markets

• Sell USDSGD Trend – MT is bear normal. Continue to sell.
• Sell USDCNH  Trend – MT is bear normal. Continue to sell.
• Buy Gold. Trend – MT is bull normal. Continue to buy.
• Buy Copper. Trend – MT is bull normal. Continue to buy.
• Buy Oil. Trend – MT is bull normal. Continue to buy.
• Buy S&P 500. Trend – MT is bull normal. Continue to buy.
• Wait DAX. – MT is sideways normal. Wait.
• Buy Nikkei. Trend – MT is bull normal. Continue to buy.
• Sell T-Notes.  Trend – MT is bear normal. Continue to sell, but watch for a bounce from these levels.

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Economic calendar for the week ahead:

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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.