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.
- Buy DXY. Trend – MT is bull normal. The USD continues to rise on the back of monetary policy divergence and increasing US bond yields. The high oil price may be helping the USD too by keeping the heat on inflation. There is more trade war talk with Japan and the EU discussing tariffs on US imports. Concerns still exist in this area with China and NAFTA. Until we see the price start to respond to these issues, the USD trend should not be ignored. Keep buying.
- Sell GBP/USD. Trend – MT is bear normal. GBPUSD has been somewhat range bound over the past couple of weeks, but no base has formed and we are now pressing the bottom of the range. There is uncertainty over the next rate hike and with US strength in play we can continue to sell. I prefer to wait for the price to close below 1.3450 before getting short.
- Buy USD/JPY. Trend – MT is bull normal. The BOJ remains dovish and with US yields continuing to rise the uptrend remains well intact. Keep buying.
- Sell AUD/USD. Trend – MT is bear normal. The Aussie has been bouncing around a bit. There has been some well received data, but given the key level and the strength of the USD, the bounce looks more technical in nature. But if we do start to break above 0.7600, we do have a relatively strong technical buy signal. Until that happens keep selling.
- Sell EUR/USD. Trend – MT is bear normal. As well as being under pressure from the Monetary Policy divergence theme, Political issues are coming back to the forefront. Italy is in the final stages of forming a new government which will include the Euro-skeptic Five-Star Movement party. This could be a blow to European unity so watch the headlines to see if the pair responds negatively.
- Sell NZD/USD. Trend – MT is bear normal. Dairy prices were up during the week and the pair finished Friday on a strong note. Kiwi is also supported by cross-rate buying. Over-all, any bounce should be seem as temporary due to the dovish stance of the RBNZ in the face of USD strength.
- Buy USD/CHF. Trend – MT bull normal. EURCHF sold heavily off the key 1.20 level. We can keep our eyes peeled for contrarian opportunities to buy CHF, but I prefer to look on the crosses.
- Wait USD/CAD. – MT is sideways quiet. Poor data to finish the week as well as some negative comments from US officials around NAFTA progress. This is despite Oil prices hitting new highs. Wait for now.
- Wait EUR/GBP. – MT is bull normal. We are stuck mid-range of the weekly sideways quiet MT. Wait for now.
Crosses
- Sell EUR/CHF. Trend – MT is bear normal. Look to sell.
- Buy AUD/JPY. Trend – MT is bull normal. Look to buy.
- Wait NZD/JPY. – MT is bear volatile Wait.
- Wait GBP/JPY. – MT is bear volatile. Wait.
- Sell EUR/JPY. Trend – MT is bear normal. Continue to sell.
- Buy CAD/JPY. Trend – MT is bull normal. Look to buy.
- Wait CHF/JPY. – MT is sideways volatile. Wait.
- Wait GBP/NZD. – MT is sideways normal. Wait.
- Wait EUR/NZD. – MT is sideways volatile. Wait.
- Buy AUD/NZD. Trend – MT is bull normal. Continue to buy.
- Sell EUR/AUD. Trend – MT is bear normal. Look to sell.
- Sell GBP/AUD. Trend – MT is bear normal. Continue to sell.
- Wait AUD/CAD. – MT is sideways normal. Wait.
- Sell GBP/CAD. Trend – MT is bear normal. Continue to sell.
- Sell EUR/CAD. Trend – MT is bear normal. Continue to sell.
- Sell NZD/CAD. Trend – MT is bear normal. Continue to sell.
- Sell GBP/CHF. Trend – MT is bear normal. Look to sell.
- Wait CAD/CHF. – MT is bull volatile. Wait.
- Wait NZD/CHF. – MT is sideways normal. Wait.
- Wait AUD/CHF. – MT is sideways normal. Wait.
Other Markets
- Buy USDSGD Trend – MT is bull normal. Continue to buy.
- Buy USDCNH Trend – MT is bull normal. Continue to buy.
- Wait Gold. – MT is sideways normal. Wait.
- Buy Oil. Trend – MT is bull normal. Continue to buy.
- Buy S&P 500. Trend – MT is bull normal. Look to buy.
- Buy DAX. Trend – MT is bull normal. Continue to buy.
- Buy Nikkei. Trend – MT is bull normal. Continue to buy.
- Sell T-Notes. Trend – MT is bear normal. Continue to sell.
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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.