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 Trend – MT is buy normal. The dollar index has formed a bearish engulfing candle on the weekly charts, but daily charts are just holding onto the bull MT, though it is likely to turn sideways. The technical picture is not convincing. The same headwinds continue to stall the dollars momentum. Market participants are not convinced that the Fed will aggressively hike rates (though we should get one more hike this year) due to inflation concerns. North Korea remains in the headlines and an escalation of tensions is bearish USD. There is no news yet on tax reform. Overall, I don’t have a great deal of conviction in one direction or the other at the moment. If I was to sum up, I am perhaps a “very nervous dollar bull” and I prefer to wait for some clearer direction to establish itself for now.
- Wait GBP/USD. – MT is sideways normal. Sentiment has flipped back to positive again on the GBP after reports came out that the EU might be willing to accept UK Prime Minister May’s plan’s which would result in a “soft” Brexit. This could see traders focus back on the newly hawkish BOE and increasing rate hike expectations.
- Wait USD/JPY. – MT is sideways normal. The minor double top that formed last Friday has seen the pair sell-off and flip into a sideways MT. This is on the back of USD weakness and geopolitical tensions with North Korea. Wait for now.
- Wait AUD/USD. – MT is bear volatile. The Aussie rose sharply at the end of last week. There was no major catalyst, though news from China was relatively positive and metal prices increased. Wait for now.
- Wait EUR/USD. – MT is bear volatile. The EUR looks to be flipping back into a sideways MT. Concerns around Catalonia’s independence bid from Spain still exist but the Spanish Prime Ministers hard-line stance has seen a delay of any escalation. On the central bank front, we are waiting for 26 October to hear about the ECB’s plans to reduce asset purchases. Leading into the event the tone has shifted slightly dovish (i.e. asset purchases will be cut, but the lesser of the options that have been tabled will be used). Overall, I have mixed conviction on the EUR right now and prefer to wait.
- Wait NZD/USD. Trend – MT is bear normal. The kiwi bounced sharply last week in sympathy with the Aussie, despite a lack of a clear catalyst and ongoing uncertainly around which party will govern. The saga there is ongoing so caution must be had. Wait for now.
- Wait USD/CHF. – MT is bull normal. The pair continues to oscillate around the key .9750 level. Like the other majors directions remains unclear so best to wait for now.
- Wait USD/CAD. – MT is sideways normal. We have flipped back into a sideways MT on USD weakness. There is concern, given recent data, that the BOC was a little aggressive in hiking rates, but USD weakness is keeping a lid on losses. Oil also rose strongly at the end of last week, so that will be worth keeping an eye on.
- Sell EUR/GBP. Reversal – MT is sideways normal. A large bearish engulfing candle on Thursday along with positive news about Brexit may be suggestive that the downtrend is set to continue. Selling is an option here.
Crosses
- Wait EUR/CHF. – MT is sideways normal. Wait.
- Wait AUD/JPY. – MT is sideways normal. Wait.
- Wait NZD/JPY. – MT is sideways volatile. Wait.
- Wait GBP/JPY. – MT is sideways normal. Wait.
- Wait EUR/JPY. – MT is sideways quiet. Wait.
- Wait CAD/JPY. – MT is sideways quiet. Wait.
- Sell CHF/JPY. Breakout – MT is bear normal. Look to sell.
- Wait GBP/NZD. – MT is sideways normal. Wait.
- Wait EUR/NZD. – MT is sideways volatile. Wait. Note the bearish weekly hammer is suggestive of more downside to come.
- Wait AUD/NZD. – sideways normal. Wait.
- Wait EUR/AUD. – MT is sideways volatile. Reversing off key resistance.
- Wait GBP/AUD. – MT is sideways normal. Wait.
- Wait AUD/CAD. – MT is sideways normal. Wait.
- Wait GBP/CAD. – MT is sideways quiet. Wait.
- Wait EUR/CAD. – MT is sideways quiet. Wait.
- Wait NZD/CAD. – MT is sideways normal. Wait.
- Wait GBP/CHF. – MT is sideways normal. Wait.
- Wait CAD/CHF. – MT is sideways quiet. Wait.
- Wait NZD/CHF. – MT is sideways volatile. Wait.
- Wait AUD/CHF. – MT is sideways volatile. Wait.
Other Markets
- Wait Gold. – MT is bear volatile. Wait.
- Wait Oil. – MT is sideways normal. Wait.
- Buy S&P 500. Trend – MT is bull normal. Continue to buy.
- Buy DAX. Trend – MT is bull normal. Continue to buy.
- Buy T-Notes. Contrarian – MT is bear volatile. Continue 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.