Forex Trading Opportunities for the Week Ahead 30 April 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. 

• Buy DXY. Trend – MT is bull normal. We got the break above 90.60 we have been stalking and we are now in a bull MT. With an easing of trade and geopolitical tensions and US ten year treasury yields hitting 3%, market sentiment has focused back on monetary policy divergence. We can expect the trend to continue with the upcoming FOMC meeting likely to be hawkish and signal a June rate hike. Meanwhile, with the possible exception of Bank of Canada, their counterparts remain dovish. Continue to buy.

• Sell GBP/USD. Trend – MT is bear normal. As mentioned last week we have a major double top in place on GBPUSD and we have seen further downside. This was exacerbated by weak UK GDP numbers which, along with Governer Carney’s comments have seen the chance of a May rate hike slide from 90% to 20%. Look to sell.

• Buy USD/JPY. Trend – MT is bull normal. The BOJ remains dovish and with more USD strength expected we can look for a move towards 115 in the coming weeks. The risk to this view is if we get a surprisingly dovish FOMC meeting in the coming week. Continue to buy.

• Sell AUD/USD. Trend –  MT is bear normal. The Aussie bounced on Friday and put in a bullish reversal day. This is to be expected after such a rapid slide and any bounce should be temporary. We can expect the pair to make it’s way towards 0.75. There is nothing to the change the RBA’s view that rates will remain on hold in this weeks coming meeting.

• Sell EUR/USD. Trend –  MT is bear normal. We got the break below 1.2240 that we have been looking for. This is on the back of monetary policy divergence with the ECB remaining dovish, despite some positive comments about the economy. There is risk to the ECB’s positive view in the coming week with GDP and Inflation data likely to remain tepid. Continue to sell.

• Sell NZD/USD. Trend –  MT is bear normal. The Kiwi has been selling off heavily on easing inflation pressures that are likely to keep the RBNZ dovish and, of course, USD strength. Fundamentally, there is not too much there to support the Kiwi and we can expect Friday’s bounce to be temporary.

• 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. With stocks bouncing on strong earnings and US yields increasing, the picture remains very bullish. Note the speed of the move may lead to some temporary selling.

• Wait USD/CAD.  – MT is sideways volatile. With positive comments from the BOC, the potential for a NAFTA deal, and rising oil prices, the CAD has not succumbed to USD strength as much as it’s counterparts. CAD may be a good option to play on the crosses.

• 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. 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 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 normal. Wait.
• Buy CAD/JPY.  Trend – MT is bull normal. Continue to buy.
• Sell CHF/JPY. Breakout – MT is bear normal. Continue to sell.
• Wait GBP/NZD. – MT is sideways normal. Wait.
• Wait EUR/NZD. – MT is sideways volatile. Wait.
• Buy AUD/NZD. Trend – MT is bull normal. Look to buy.
• Wait EUR/AUD. – MT is sideways normal. Wait.
• Wait GBP/AUD. – MT is sideways quiet. Wait.
• Wait AUD/CAD. –  MT is bear normal. Wait
• Sell GBP/CAD. Trend –  MT is bear normal. Look to sell.
• Wait EUR/CAD. –  MT is bear volatile. Wait.
• Sell NZD/CAD. Trend – MT is bear normal. Continue to sell.
• Wait GBP/CHF. – MT is bull volatile. Wait.
• Buy CAD/CHF. Trend – MT is bull normal. Continue to buy.
• Wait NZD/CHF. – MT is sideways volatile. Wait.
• Buy AUD/CHF. Trend – MT is bull normal. Look to buy.

Other Markets

• Buy USDSGD Trend – MT is bull normal. Continue to buy.
• Buy USDCNH Trend – MT is bull normal. Look to buy.
• 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. Continue 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.