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.
- Sell DXY Trend – MT is bear normal. An upbeat payrolls number on Friday has seen a bullish weekly Doji form off weekly support. So while the trend remains bearish, a bounce can be expected here. The good NFP numbers probably won’t greatly increase the chances of further rate hikes this year, but will the USD oversold a change in direction here, at least in the short-term should not be a surprise. In saying that we can continue to hold shorts as the trend is not broken yet and the bounce shallow, but we need to maintain caution and close above 94.00 will likely signal a transition to a sideways MT.
- Wait GBP/USD. – MT is Bull volatile. A bearish engulfing candle on Thursday on the back of a dovish BOE meeting followed by a further sell-off after NFP means the bullish breakout has failed for now. Further downside can be expected.
- Sell USD/JPY. Trend – MT is bear normal. The bear trend is still intact, but with US 10-year bonds failing to break 126 and the good payroll data we need to watch for a flip to a sideways MT. Trade with caution.
- Buy AUD/USD. Trend – MT is bull normal. The Aussie may experience some fundamental headwinds here despite the bull MT remaining intact for now. The RBA has expressed concerns about the strength of the Aussie dollar and we need to remember that the Federal reserve is in a hiking cycle. On the positive side Iron Ore continues to bounce. Watch for a close below .7880 to for a change in MT. Trade with caution.
- Buy EUR/USD. Trend – MT is bull normal. Despite Fridays sell-off the bull trend remains intact. European data and central bank hawkishness continues to support the rise of the pair, though bond markets show German bond yields slipping – this is something to watch closely as it’s unlikely the current trajectory of the EUR will be sustained if the divergence continues between US and German Bonds.
- Wait NZD/USD. – MT is bull normal. A weekly bearish engulfing candle has formed off weekly resistance, which is suggestive that the bull MT may be coming to an end. In any case it is not worth fighting this pattern with safer opportunities elsewhere. Fundamentally, the chances are the RBNZ will be supportive of a bearish reversal here and Dairy prices were down a bit to in the latest auction.
- Wait USD/CHF. – MT is sideways volatile. We have bounced off major support with the formation off a bullish engulfing week, 2 weeks ago. Watch for a break above .9780 for a switch to a bull MT.
- Wait USD/CAD. – MT is bear volatile. Despite some decent data out of Canada we have seen the pair bounce off weekly support and form a weekly bullish engulfing candlestick pattern. This ends the bear MT that has been intact since the 22nd of May. Wait for now, or possible contrarian long-term buy.
- Buy EUR/GBP. Trend – MT is bull normal. The pair has taken out resistance at 9050 and we can look for a move towards .9200 next. There is a clear fundamental divergence in both central bank outlooks and economic performance that is driving this trend.
Crosses
- Buy EUR/CHF. Trend – MT is bull normal. Continue to buy, some profit taking appropriate here.
- Sell AUD/JPY. Contrarian– MT is bull normal. We have a minor double top formed off resistance. Continue to sell
- Sell NZD/JPY. Breakout – MT is bear normal. The bullish breakout has failed and a bearish engulfing week has formed, look to sell.
- Wait GBP/JPY. – MT is sideways quiet. Look to sell below 1.4360
- Buy EUR/JPY. Trend – MT is bull normal. Continue to buy.
- Sell CAD/JPY. Breakout – MT is bear normal. The minor topping pattern of weekly support has lead to the formation of a bearish engulfing week and a breakout into a bear MT. Look to sell.
- Sell CHF/JPY. Trend – MT is bear normal. Continue to sell.
- Wait GBP/NZD. – MT is sideways normal. Wait.
- Buy EUR/NZD. Trend – MT is bull normal. Buy on a dip.
- Wait AUD/NZD. – MT is bull normal. Look to buy.
- Wait EUR/AUD. – MT is sideways volatile. Wait.
- Sell GBP/AUD. Trend – MT is bear normal. Continue to sell.
- Wait AUD/CAD. – MT is sideways volatile. Wait.
- Wait GBP/CAD. – MT is sideways normal. Wait.
- Buy EUR/CAD. Trend – MT is bull normal. Look to buy.
- Wait NZD/CAD. – MT is sideways normal. Wait.
- Wait GBP/CHF. – MT is bull normal. Wait.
- Buy CAD/CHF. Trend – MT is bull normal. Continue to buy, but careful as we have failed to break weekly resistance.
- Buy NZD/CHF. Trend – MT is bull normal. Continue to buy,
- Buy AUD/CHF. Trend – MT is bull normal. Continue to buy.
Other Markets
- Buy Gold. Trend – MT is bull normal. Continue to buy.
- Buy Oil. Trend – MT is bull normal. Continue to buy.
- Buy S&P 500. Trend – MT is bull normal. Continue to buy.
- Sell DAX. Trend – MT is bear normal . Continue to sell, but careful of a weekly bullish reversal pattern in play.
- 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.