Forex Trading Opportunities for the Week Ahead 6 March 2017

I plan my trading for the week ahead each weekend. Here are the Forex trading opportunities I will be stalking 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 sideways normal. The DXY is holding above the key 100 level. Sentiment has shifted toward what looks like an imminent rate hike by the Federal Reserve. Fed speak has turned hawkish  in order to telegraph the move, with only the minor hurdle of this weeks NFP having the potential to derail the hike. Meanwhile, the Trump reflation trade is still in vogue with stocks at highs and US economic data outperforming. The only thing really holding back the dollar is more clarity on President Trumps growth and trade plans. Note the US bonds are near the bottom of the recent rate which is also supportive of the dollar (though a reversal pattern has formed). Technically, have shift to a bull MT, but given Fridays sell-off some caution is required. Look to buy on a dip only.

• Sell GBP/USD. Trend – MT is sideways normal. The pound broke down out of the recent range on the back of poor data and USD strength. We had a reversal day on Friday so look to sell a rally only.

• Wait USD/JPY. – MT is sideways normal. The pair moved higher on the back of the sell-off in US bonds.The rally stalled on Friday, but we can expect it to resume this coming week if bonds don’t recover from the bottom of the range. Look to trade a break of 115.30 on a shift to a bull MT. 

• Sell AUD/USD. Trend –  MT is bear normal. Last weeks reversal scenario played out and we have shifted into a bear normal MT. Iron Ore continued it’s sell off. This week we have the RBA where Governor Lowe is expected to keep rates on hold. Continue to sell.

• Wait EUR/USD.  –  MT is sideways normal. After selling off this week, the Euro closed higher with the formation of a bullish engulfing candle, which I suspect was on the back of the large fall in Bunds. This has shifted us into a sideways MT. We can expect a push back toward 1.07 this week, but whether this level holds will depend on the ECB (whom should maintain their dovish stance) and on the results of NFP. Wait for now.

• Sell NZD/USD. Trend –  MT is bear normal.  The Kiwi is suffering on the back of US strength, weak data and RBNZ that is unhappy with the currency at these levels. Continue to look short, though carefully if a reversal pattern forms on Monday.

• Wait USD/CHF.  – MT is bull normal. We have flipped to a bull normal MT, but a minor double top is in place with the formation of Friday’s bearish engulfing candle. This is suggestive of a shift back into a sideways MT in the near term, so best to wait.

• Buy USD/CAD. Trend – MT is bull normal. The BOC is maintaining its dovish stance and Oil remains range bound. While we have a bull MT, Friday produced a bearish hammer off resistance indicative of a short-term sell off. Buy on a dip only.

• Wait EUR/GBP. – MT is sideways normal. We went from bottom to the top of the range on the back of a large divergence in Bunds and Gilts. Buy on a break above .8670.

Crosses

• Buy EUR/CHF.  Breakout – MT is bull normal. Look to buy on a breakout to a bull MT.
• Wait AUD/JPY.  – MT is sideways normal. Wait.
• Sell NZD/JPY.  Trend – MT is bear normal. We have flipped to a bear normal MT which should provide a decent selling opportunity in particular if US Bonds hold within the current range.
• Wait GBP/JPY.  – MT is sideways quiet. Look for a break of 138.00 to sell the pair.
• Wait EUR/JPY. – MT is sideways normal. Wait.
• Wait CAD/JPY. – MT is sideways normal. Wait.
• Wait CHF/JPY. – MT is bear volatile. Wait.
• Wait GBP/NZD. – MT is sideways quiet. Trade a break above 1.7550
• Buy EUR/NZD. Trend – MT is bull fast. Look to buy, but keep stops tight in this MT.
• Buy AUD/NZD. – MT is bull normal. Look to buy.
• Wait EUR/AUD. – MT is sideways normal. Wait.
• Wait GBP/AUD. – MT is sideways normal. Wait, a busted breakout suggests there may be some upside here.
• Buy AUD/CAD. Trend –  MT is bull normal. Look to buy, lower conviction.
• Wait GBP/CAD. –  MT is sideways quiet. Trade a break of 1.6550.
• Buy EUR/CAD. Trend –  MT is bull normal. Look to buy.
• Wait NZD/CAD. – MT is sideways normal. Wait.
• Wait GBP/CHF.  – MT is sideways normal. Wait.
• Sell CAD/CHF.  Trend – MT is bear normal. Look to sell.
• Sell NZD/CHF. Trend – MT is bear normal. Look to sell.
• Wait AUD/CHF. – MT is bull volatile. Wait.

Other Markets

• Buy Gold. Trend  – MT is bull normal. Continue to buy.
• Wait Oil.  – MT is sideways quiet. Wait.
• Buy S&P 500. Trend – MT is bull normal. Continue to buy.
• Wait T-Notes – MT is sideways normal. Buying opportunity here at the bottom of the range. Good risk/reward.

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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.

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