Forex Trading Opportunities for the Week Ahead 23 Apr 18: FXRenew

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 quiet. The dollar index is again pressing towards the top of the range that began in January. Geopolitical and trade risks have cooled down and perhaps market participants are focusing back on monetary policy and economic divergence between the U.S. and it’s counterparts. I like to buy above 90.60.

• Wait GBP/USD. – MT is sideways volatile. After taking out the high at 1.4350, the pair has reversed strongly and we have a major double top in place. This is indicative of a further slide. The technical pattern developed on the back of weak data and then a flip-flop from BOC Governor Carney on the chances of a rate hike in May. The markets are now pricing in about a 50% chance rather than a 80% chance.

• Buy USD/JPY. Breakout – MT is bull normal. While momentum has been lacking, the pair is just off it’s recent high. With geopolitical tensions easing, the focus shifts back to monetary policy divergence. Importantly, despite the sell-off in stocks on Friday, the pair rose. Continue to buy.

• Wait AUD/USD. –  MT is sideways normal. The Aussie sold off heavily in the last two days of the week and we are near recent lows. This was on the back of USD strength, some weak Australian data and a bout of risk-off in stocks. I still think we are heading towards 0.75 and lower.

• Wait EUR/USD. –  MT is sideways quiet. There is talk of a break of the range leading to increase in volatility. We can expect the ECB to be dovish in this weeks meeting with economic and inflation data of concern. There is clearly monetary policy divergence between the U.S. and Europe and I do like the fundamental story for a downward move in the pair. Look to sell below 1.2240.

• Wait NZD/USD. –  MT is sideways volatile. The Kiwi sold off heavily last week on the back of easing inflation pressures that are likely to keep the RBNZ dovish. I like to sell the pair below 0.7150, though I prefer a pull-back entry.

• Buy USD/CHF. Trend – MT bull normal. The pair is rising on USD strength and there is little to stop it heading back towards 1.00. Of note, EURCHF has broken the key 1.20 level, which was the floor before the SNB crisis in 2015. The SNB will be keen to keep the pair above this level. Of course, this is a safe haven currency so we do need to be careful if Friday’s sell-off in stocks continues.

• Wait USD/CAD.  – MT is bear volatile. A minor double bottom formed last week after the BOC came out more dovish than expected. The bounce continued on the back of USD strength and there looks to be more upside potential. This can be a good market type for short-term traders.

• Wait EUR/GBP.  – MT is sideways volatile. After waiting a very long time for the breakout of the weekly sideways quiet MT, the breakout attempt failed on the back of poor UK data and inconsistent BOE speak (Carney was once called an “un-reliable boyfriend for his changing views on rate hikes). We are now back in the range so it is best to wait.

Crosses

• Buy EUR/CHF. Trend – MT is bull normal. Continue to buy.
• Wait AUD/JPY. – MT is bull normal. Topping pattern in place. Wait.
• Wait NZD/JPY. – MT is bull volatile. Wait.
• Wait GBP/JPY. – MT is bull volatile. Wait.
• Wait EUR/JPY. – MT is sideways normal. Wait.
• Buy CAD/JPY.  Trend – MT is bull normal. Continue to buy.
• Sell CHF/JPY. Breakout – MT is bear normal. Look to sell.
• Wait GBP/NZD. – MT is sideways quiet. Wait.
• Wait EUR/NZD. – MT is sideways volatile. Wait.
• Wait AUD/NZD. – MT is sideways normal. Wait.
• Wait EUR/AUD. – MT is sideways normal. Wait.
• Wait GBP/AUD. – MT is sideways quiet. Wait.
• Wait AUD/CAD. –  MT is bear normal. Bottoming pattern in place. Wait.
• Wait GBP/CAD. –  MT is sideways normal. Wait.
• Wait EUR/CAD. –  MT is bear volatile. Wait.
• Sell NZD/CAD. Trend – MT is bear normal. Look to sell, but careful of Friday’s hammer.
• Buy GBP/CHF. Trend – MT is bull normal. Continue to buy.
• Buy CAD/CHF. Trend – MT is bull normal. Continue to buy.
• Buy NZD/CHF. Trend – MT is bull normal. Continue to buy. 
• Wait AUD/CHF. – MT is bull normal. Wait.

Other Markets

• Buy USDSGD Breakout – MT is bull normal. Look to buy.
• Wait USDCNH  – MT is sideways quiet. Wait.
• Wait Gold.  – MT is sideways normal. Wait.
• Buy Oil. Trend – MT is bull normal. Continue to buy.
• Wait S&P 500.  – MT is sideways normal. Wait.
• Wait DAX. – MT is sideways normal. Wait.
• Wait Nikkei. – MT sideways normal. Wait.
• Sell T-Notes. Trend – MT is bear normal. Look to sell.

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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.