Forex Trading Opportunities for the Week Ahead 16 May 2016

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. 

Majors

• Wait GBP/USD. – MT is bull volatile. Data continues to be poor out of the UK and the risks surrounding the pending BREXIT referendum remain a focus for GBP traders. Technically, the break on Friday of 1.44 and the bearish picture on weekly charts suggest that there is more downside, with 1.40 as the next target. We wait for the MT to turn bearish on the daily charts before switching our call to sell, though aggressive traders can consider shorts now I think.
• Sell USD/JPY. Trend – MT is bear normal. I think we are relatively safe to continue to sell the pair with the risk of BOJ intervention low ahead of the May 20-21 G7 meeting. Note that the MT is close to turning sideways. A lower conviction trade just now.
• Sell AUD/USD. Trend –  MT is bear normal. The downtrend continues after the RBA’s surprise rate cut two weeks ago. Continue to sell.
• Wait EUR/USD. – MT is sideways normal. Weak GDP data has continued to pressure the euro after the formation of a weekly hammer two weeks ago. Similar to GBP we are waiting for the bull market to confirm before switching our call to short. The downside is very much favored.
• Sell NZD/USD. Trend – MT is bear normal. The kiwi remains weak after poor retail sales data and we have now switched to bear MT. This weakness is despite comments from RBNZ’s Wheeler, where he suggested that the next rate cut may not be as soon as expected.
• Wait USD/CHF. – MT is sideways volatile. I expect the price to move towards .98 and if the USD continues to strengthen vs. the EUR, then we should see the pair head higher still.
• Wait USD/CAD. – MT is sideways volatile. I expect USDCAD to consolidate for a while now after the recent downtrend. We need to watch Oil carefully for clues. Oil remains fundamentally challenged but the price is near recent highs on the back of speculative buying. A sharp reversal in the commodity should lead to CAD selling, moving USDCAD into bull MT territory. If Oil remains bid we can expect the consolidation in USDCAD to continue for an extended period.
• Wait EUR/GBP. – MT is sideways normal. We are now in a sideways MT so caution is required. Shorter-term traders can watch for a break of the sideways MT on the 4 hour charts for a move back to either 77 or 81 depending on the direction of the break.

Crosses

• Buy EUR/CHF. Trend – MT is bull normal. There is a minor topping formation in place, and while it does not cancel our bullish call, I suggest caution.
• Sell AUD/JPY.  Trend– MT is bear normal. Continue to sell. This trade could go very well if the S&P500 index breaks below 2040.
• Wait  NZD/JPY. – MT is sideways volatile. Look for a below 72.50 to initiate shorts.
• Wait GBP/JPY. – MT is sideways volatile. Wait for now.
• Wait EUR/JPY.  – MT is sideways volatile. Wait for now. A break of support at 121.50 looks interesting here.
• Wait CAD/JPY. – MT is sideways volatile. Wait for now.
• Sell CHF/JPY. Trend– MT is bear normal. Continue to sell.
• Wait GBP/NZD. – MT is sideways normal. Wait for now.
• Wait EUR/NZD.  – MT is sideways normal. Wait for now, though the pin candle off resistance suggests we could see more downside.
• Sell AUD/NZD. Trend– MT is bear normal. Continue to sell.
• Buy EUR/AUD.  Trend – MT is bull normal. Buy, but careful as we are seeing signs of topping.
• Buy GBP/AUD. – MT is bull normal.  Continue to buy.
• Sell AUD/CAD. –  MT is bear normal. Continue to sell.
• Wait GBP/CAD. –  MT is sideways normal. Wait for now.
• Wait EUR/CAD. –  MT is sideways volatile. Wait or sell after a topping formation in this MT.
• Wait NZD/CAD. – MT is sideways normal. Wait or now.
• Wait GBP/CHF. – MT is sideways normal. Wait for now.
• Wait CAD/CHF.  – MT is bull volatile. Wait for now.
• Wait NZD/CHF. – MT is sideways normal. Wait for now.
• Sell AUD/CHF.  – MT is bear normal. Sell but low conviction.

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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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