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 – MT is sideways normal. A large bullish engulfing day on Monday put paid to the bear MT (for now). With the French election out of the way the focus is back on the Fed and interest rates. Fed speak remains hawkish and the chance of a June rate hike is priced in at 90%. Bold yields are driving price action and if bonds continue to bounce here the USD could struggle. You can see the weak finish to the week was due to the rise in bonds with the correlation between the two instruments high. This suggests the market will remain sensitive to yields for the next little while.
- Buy GBP/USD. Trend – MT is bull normal. The BOE Super Thursday meeting was seen as dovish with Carney emphasizing Brexit risks over any improvements in the performance of the economy. We are very close to turning sideways here if we get any more choppy price action so best to buy a break above 1.3025.
- Buy USD/JPY. Trend – MT is sideways normal. Despite dovish speak from the BOJ and risk-on in equities the USD struggled v. the yen to finish the week. This has to do with bond yields. We can continue to buy, but with caution if US bonds continue to climb.
- Sell AUD/USD. Trend – MT is bear normal. The Aussie continues to struggle with falling metal prices (in particular Iron Ore) and some poor data both from Australia and China. A bearish hammer formed on Friday, also suggestive of a continuation of the downtrend. Continue to sell.
- Buy EUR/USD. Trend – MT is bull normal. In a classic buy the rumor sell the fact response, the market sold off after the Macron win in the French election. Nether-the-less, and despite a dovish Draghi and Hawkish Fed, the rise in US Bond yields on the back of weaker US data has formed a bullish engulfing pattern to finish the week. This keeps the uptrend intact for now. Keep buying.
- Wait NZD/USD. – MT is sideways normal. Last weeks reversal pattern failed on the back of a dovish RBNZ. We are close to a bear MT and can look to sell a break of .6820, last week’s low.
- Wait USD/CHF. – MT is sideways normal. The CHF has weakened on the back of the unwinding of French election risk. This saw the pair shoot higher from last Monday. We have sold off again somewhat and are now sitting mid-range. Wait for now.
- Buy USD/CAD. Trend – MT is bull normal. The bull market remains in place, but we are showing signs that we may be turning sideways. CAD struggled last week despite the bounce in Oil on the back of a Moody’s downgrade of Canadian banks and continued concerns around trade with the U.S. Buying USDCAD remains the correct strategy – with caution.
- Wait EUR/GBP. Trend– MT is sideways normal. We remain in a sideways MT and are sitting mid range, so wait for now. Look to buy a break of .8560 or sell through .8270.
Crosses
- Buy EUR/CHF. Trend – MT is bull normal. Look to buy but with caution.
- Wait AUD/JPY. – MT is sideways normal. Wait.
- Wait NZD/JPY. – MT is bull volatile. Wait.
- Buy GBP/JPY. Trend – MT is bull normal. Continue to buy.
- Buy EUR/JPY. Trend – MT is bull normal. Continue to buy.
- Buy CAD/JPY. Trend – MT is bull normal. Continue to buy, but with much caution required.
- Buy CHF/JPY. Trend – MT is bull normal. Continue to buy.
- Buy GBP/NZD. Trend – MT is bull normal. Continue to buy.
- Buy EUR/NZD. Trend – MT is bull normal. Continue to buy.
- Wait AUD/NZD. – MT is bear volatile. Wait.
- Buy EUR/AUD. Trend – MT is bull normal. Continue to buy.
- Buy GBP/AUD. Trend – MT is bull normal. Continue to buy.
- Wait AUD/CAD. – MT is sideways volatile. Wait for now.
- Buy GBP/CAD. Trend– MT is bull normal. Continue to buy.
- Buy EUR/CAD. – MT is bull normal. Continue to buy.
- Wait NZD/CAD. – MT is sideways normal.Wait.
- Buy GBP/CHF. Trend – MT is bull normal. Continue to buy.
- Wait CAD/CHF. – MT is bull volatile. Wait.
- Wait NZD/CHF. – MT is sideways volatile. Wait.
- Sell AUD/CHF. Trend – MT is bear normal. Continue to sell.
Other Markets
- Sell Gold. Trend – MT is bear normal. Continue to sell.
- Wait Oil. – MT is bear volatile. Wait.
- Wait S&P 500. Trend – MT is bull normal. Look to buy.
- Buy DAX. Trend – MT is bull normal. Continue to buy.
- Wait T-Notes – MT is sideways normal.Wait.
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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.