Forex Trading Opportunities for the Week Ahead 16 Jan 17

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. 

• Wait DXY  – MT is sideways normal. This week the main event for the USD is the inauguration of Donald Trump. Last week the market was disappointed by the lack of meaningful content in his speech…we will see what this weeks brings. What we did have confirmed though, was how market moving politics could be this year. Trump says nothing and currencies move by 1%. This week we also have several FOMC speeches including Yellen speaking twice. US bond yields are flashing more bearish signs with a weekly hammer after a period of consolidation, a continuation of the downtrend this week will be bullish USD. Technically, on the dollar index, we have a bullish daily hammer off the bottom of the range in a sideways market type which often leads to some upside.

• Wait GBP/USD. – MT is sideways normal. Sentiment is bearish GBP at the moment with Brexit concerns in the limelight. Watch for a speech by PM May this Tuesday for clarification. There is a busy calendar this week, and UK data so far this year has not been bad. Technically, we have a busted breakout below key support with the formation of a bullish hammer. This souls dominate proceedings on the pair unless we close below 1.2040.

• Sell USD/JPY. Trend – MT is bear normal. No change of note in the fundamentals. Technically we have shifted into a messy bear MT, which could quickly flip back into a sideways MT if the week starts out with traders buying USD. Sell with caution.

• Wait AUD/USD. –  MT is sideways volatile. The AUD has been strengthening on the back of rising metal prices, broad based USD weakness and global risk-on sentiment. This has flipped the weekly chart back into a sideways MT from a bear. We are currently sitting at the key .75 level with more resistance just above. The MT suggests we should be careful a turn at these levels and that the reversal could be sharp.

• Wait EUR/USD.  –  MT is sideways normal. Despite political risks, data has been good out of the eurozone. We are currently sitting at key support and if we break above 1.07 then there is the potential for a fair bit of upside. We are currently at the top of a daily sideways MT and a reversal here could lead to a shorting opportunity back to the bottom of the range at 1.0350. Watch for the ECB this week, where we can expect them to maintain their dovish stance.

• Buy NZD/USD. Trend –  MT is bull normal. We have flipped completely from bear to bull MT last week following along with the AUD. This week we have the global dairy trade auction to watch out for, the recent trend has been negative, but we have picked up well off the lows. Buy but on a dip due to the speed of the MT transition.

• Sell USD/CHF. Trend – MT is bear normal. Similar to USDJPY the bear MT transition is messy and we could easily flip back into a sideways MT. Trade with caution.

• Wait USD/CAD.  – MT is sideways volatile. CAD is being supported by Oil holding around the $50 level. We are currently in a sideways volatile MT and with the bullish hammer (Thursday) after a busted breakout we have the potential for a lucrative reversal. I would wait for a break above 1.3180 to enter.

• Buy EUR/GBP. Trend – MT is bull normal. Look to buy the pair, but on a dip as we have a minor double top in place. If we see a sell-off in EURUSD I would stay out of the pair all together.

Crosses

• Wait EUR/CHF.  – MT is sideways normal. Wait.
• Wait AUD/JPY. – MT is sideways normal. Wait.
• Wait NZD/JPY. – MT is sideways quiet. Look for a breakout above 82.20 as a nice buying opportunity.
• Sell GBP/JPY.  Trend – MT is bear fast. Look to sell, nice opportunity for short term traders.
• Wait EUR/JPY. – MT is sideways quiet. Look to sell a break 1.21.
• Wait CAD/JPY. – MT is sideways normal. Wait.
• Wait CHF/JPY. – MT is sideways quiet. Wait.
• Sell GBP/NZD. Trend – MT is bear fast. Look to sell.
• Sell EUR/NZD. Trend – MT is bear normal. Look to sell.
• Wait AUD/NZD. – MT is sideways normal. Wait.
• Wait EUR/AUD. – MT is sideways volatile. Wait.
• Wait GBP/AUD. – MT is sideways quiet. Wait.
• Buy AUD/CAD. Trend –  MT is bull normal. Look to buy.
• Sell GBP/CAD. Trend –  MT is bear normal. Look to sell.
• Wait EUR/CAD. –  MT is sideways normal. Wait.
• Wait NZD/CAD. – MT is sideways normal. Wait
• Wait GBP/CHF. – MT is bear normal. Look to sell.
• Wait CAD/CHF.  – MT is sideways normal. Wait.
• Wait NZD/CHF. – MT is sideways volatile. Wait.
• Wait AUD/CHF.  – MT is sideways volatile. Wait.

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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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