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 normal. We have a technical double top in place after a busted breakout of the prior high on 29th of May. There is no major fundamental change that is driving this move so I suspect that we are in for a period of consolidation rather than a longer-term reversal. Fundamentally, there are concerns around the escalation of trade wars between the US v. China and Europe in particular. I would suggest this is all part of President Trumps negotiation tactics and if he gets deals he considers fair then not a lot will eventuate. In the meantime it does cause market participants some concerns. The divergence trade is also alive and well with continued divergence in both economic performance and monetary policy between the US and it’s major counterparts. Again, this leads me to thing the recent sell-off in the USD is consolation rather than reversal. Watch out for US inflation numbers this week.
- Wait GBP/USD. – MT is sideways normal. We remain in the sideways MT after a hawkish BOE meeting on Thursdays which saw the chance of a hike at the BOE meeting in August increase. No firm bottom is in place and Brexit issues are still at the forefront
- Wait USD/JPY. – MT is sideways normal. USDJPY is caught between risk-off concerns around trade and monetary policy divergence. Wait for clear direction, though I favor the upside.
- Wait AUD/USD. – MT is bear normal. A small double bottom has formed ahead of the key 0.7330 level and the pair bounced strongly on Friday. Fundamentally, the AUD has been struggling on the back of trade concerns, China worries and monetary policy divergence. The picture is a bit tricky with the key level at 0.7330 ideally being taken before a reversal is considered as high probability so best to wait for now.
- Wait EUR/USD. – MT is sideways normal. A double bottom is in place and we look to be in for a period of consolidation. Monetary policy and politics along with trade concerns have all been weighing on the EUR and I suggest they will continue to, despite the technical bounce. Trump announced plans for Tariffs on European cars on Friday unless he gets a better deal from Europe (these tariffs are subject to a review). Along with this, Euroskeptics have been appointed in the new Italian government which is raising some concerns.
- Wait NZD/USD. – MT is sideways normal. A double bottom is also in place on the Kiwi. Data has not been great out of NZ and the RBA remains dovish. Expect a bounce but not a longer-term reversal.
- Wait USD/CHF. – MT sideways normal. The pressure remains on USDCHF after the key 1.00 level was taken out in early May. With some risk-off sentiment in play particularity around trade, there may well be some further CHF strength.
- Buy USD/CAD. Trend – MT is bull normal. A key reversal day after a strong run suggests some downside ahead. Now is a good time to take some profits if you are long. CAD has been struggling on the back of ongoing NAFTA concerns and divergent monetary policy. The price of oil has also been key. Oil had weakened ahead of Friday’s OPEC meeting with production increases on the horizon. But OPEC’s 1 million barrel per day increase was seen as a let down by market participants and oil was up 5% on the day. This coincided with the reversal day for USDCAD. Continue to buy, but wait for a sign the trend has resumed.
- Wait EUR/GBP. – MT is sideways quiet. We are stuck mid-range of the weekly sideways quiet MT. Wait for now.
Crosses
- Sell EUR/CHF. Trend – MT is bear normal. Continue to sell.
- Buy AUD/JPY. Reversal – MT is sideways volatile. Busted breakout off the bottom of the range provides a buying opportunity.
- Wait NZD/JPY. – MT is sideways volatile. Wait.
- Wait GBP/JPY. – MT is sideways normal. Wait.
- Wait EUR/JPY. – MT is sideways volatile. Wait.
- Sell CAD/JPY. Trend – MT is bear normal. Look to sell.
- Wait CHF/JPY. – MT is sideways normal. Wait.
- Wait GBP/NZD. – MT is sideways normal. Wait.
- Buy EUR/NZD. Trend – MT is bull normal. Look to buy.
- Sell AUD/NZD. Breakout – MT is bear normal. Continue to sell.
- Buy EUR/AUD. Trend – MT is bull normal. Look to buy.
- Wait GBP/AUD. – MT is bull normal. Minor double top in place.
- Buy AUD/CAD. Trend – MT is bull normal. Continue to buy.
- Wait GBP/CAD. – MT is bull normal. Careful as bearish hammer in play.
- Wait EUR/CAD. – MT is bull normal. Careful as bearish hammer in play.
- Wait NZD/CAD. – MT is sideways normal. Wait.
- Sell GBP/CHF. Trend – MT is bear normal. Continue to sell.
- Sell CAD/CHF. Trend – MT is bear normal. Continue to sell.
- Wait NZD/CHF. – MT is sideways normal. Wait.
- Wait AUD/CHF. – MT is bear normal. Minor double bottom in place.
Other Markets
- Buy USDSGD. Trend – MT is bull normal. Look to buy.
- Buy USDCNH. Trend – MT is bull normal. Continue to buy.
- Sell Gold. Trend – MT is sideways quiet. Wait.
- Buy Oil. Breakout – MT is bull normal. Look to buy.
- Wait S&P 500. – MT is sideways normal. Wait.
- Sell DAX. Breakout – MT is bear normal. Look to sell.
- Wait Nikkei. – MT is sideways normal. Wait
- Wait T-Notes. – MT is sideways normal. Wait.
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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.