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 bear volatile. The USD is making somewhat of a comeback. This is on the back of increasing rate hike expectations, rising bond yields and risk-off flows given the large sell-off in global stocks. Often, this MT will consolidate before switch direction to bullish. But given the strong drivers we may see a rather rapid transition. Watch for a close above 91.00 to confirm the change in trend.
- Wait GBP/USD. – MT is bull volaitle. We got the expected correction outlined in last week’s report. Sterling continued to sell-off and ended up as one of the weakest performers due to some Brexit nervousness. This was despite a decidedly hawkish central bank and the likelihood of more rate hikes much earlier than the market anticipated.
- Sell USD/JPY. Trend – MT is bear normal. The bear normal MT continues, though the large doji on Friday off the immediate-term low and a recovery in equities may offer a clue that we will bounce here. Technically though, we would like the low at 107.30 to be taken out before we see a trade-able reversal. The key will be stocks, with the yen in risk-off mode in the last week. If stocks bounce strongly in the new week the yen should head higher, if the bounce is weak or selling hits stocks then look for 107 to be taken out.
- Sell AUD/USD. Trend – MT is bear normal. Risk-off, a dovish central bank, poor data and falling commodity prices are driving the pair lower vs. a USD where the central bank is decidedly more hawkish. Continue to sell.
- Wait EUR/USD. – MT is bull volatile. Despite continued good data and benign central bank, the EUR is sliding vs. USD strength and risk-off. Wait for now.
- Wait NZD/USD. – MT is sideways normal. The Kiwi has been selling off due to risk-off. But the slide has been limited by improving dairy prices, some better employment data and a lack of concern from the RBNZ about the high level of the currency.
- Sell USD/CHF. – MT bear normal. Data has been good out of Switzerland and despite talk of SNB intervention, the pair remains in a bear MT. If the selling in global stocks continues we can expect further CHF strength, though the better play is probably against the crosses.
- Wait USD/CAD. – MT is sideways normal. The picture for the CAD has deteriorated with poor employment data, a falling oil price and risk-off all hampering the currency. NAFTA concerns remain too. Technically, watch out for Fridays bearish hammer. This may be a sign of further selling, in particular if stocks bounce.
- Wait EUR/GBP. – MT is sideways normal. We remain firmly back within the range. Note we have developed a weekly sideways quiet MT, when these breakout, they tend to lead to a strong move. Wait for now and stalk the breakout.
Crosses
- Sell EUR/CHF. Trend – MT is bear normal. Continue to sell.
- Sell AUD/JPY. Breakout – MT is bear normal. Continue to sell.
- Wait NZD/JPY. – MT is sideways normal. Wait.
- Sell GBP/JPY. Trend – MT is bear normal. Look to sell.
- Sell EUR/JPY. Trend – MT is bear normal. Look to sell, but the price action is not pretty.
- Sell CAD/JPY. Trend – MT is bear normal. Look to sell.
- Wait CHF/JPY. – MT is sideways volatile. Wait.
- Wait GBP/NZD. – MT is sideways normal. Wait.
- Wait EUR/NZD. – MT is sideways normal. Wait.
- Sell AUD/NZD. Trend – MT is bear normal. Look to sell.
- Buy EUR/AUD. Trend – MT is bull normal. Continue to buy, but careful of the topping action here at resistance.
- Buy GBP/AUD. Trend – MT is is bull normal. Continue to buy, but careful of the topping action here at resistance.
- Wait AUD/CAD. – MT is sideways volatile. Wait.
- Buy GBP/CAD. Trend – MT is bull normal. Continue to buy.
- Buy EUR/CAD. Trend – MT is bull normal. Continue to buy, but careful of the topping action here
- Wait NZD/CAD. – MT is sideways quiet. Wait.
- Sell GBP/CHF. – MT is bear normal. Look to sell.
- Sell CAD/CHF. Trend – MT is bear normal. Continue to sell.
- Sell NZD/CHF. Trend – MT is bear normal. Continue to sell.
- Sell AUD/CHF. Trend – MT is bear normal. Continue to sell.
Other Markets
- Wait USDSGD – MT is sideways volatile. Wait.
- Sell USDCNH Trend – MT is bear normal. Continue to sell.
- Wait Gold. – MT is sideways normal. Wait.
- Sell Oil. Trend – MT is bear normal. Look to sell.
- Wait S&P 500. – MT is bear extreme. Wait.
- Sell DAX. Trend – MT is bear normal. Contine to sell.
- Sell Nikkei. Trend – MT is bear normal. Continue to sell.
- Sell T-Notes. Trend – MT is bear normal. Continue to sell.
View bank reports and fundamental analysis in the chatroom (members only)
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.