Forex Trading Opportunities for the Week Ahead 1 Feb 2016

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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. 

  • Wait GBP/USD.  – MT is sideways normal. We are sitting at the 2010 key level and have formed two weekly spinning tops in a row. Expectations have been pushed out for any form of rate hike this year, and Brexit concerns still weigh on the pair. Super Thursday this week might shed a bit more light, and I expect the statement to err on the dovish side. If not watch out for the bounce.
  • Buy USD/JPY. Trend – MT is bull fast. The BOJ surprised with negative interest rates. This is quite a significant development, and the impact will be long lasting. I still worry about what happens to the yen on risk-off ( it makes an even more attractive funding currency now), but in the absence of a deep stock market sell off, we should see the yen push higher. As mentioned last week the technical look constructive with a busted breakout and bullish engulfing week.
  • Wait AUD/USD.  Trend –  MT is sideways normal. A mix between a bear volatile and sideways normal MT. Best to remain cautious here. BOJ + stock technical patterns suggest we may see risk-on this week.
  • Sell EUR/USD. Reversal/ breakout– MT is sideways normal. I continue to like this pair short with growing conviction. The BOJ announcement is a harbinger of things to come with the ECB, and I continue to look short at the top the the range and will go short on the breakout lower.
  • Wait NZD/USD. Trend – MT is sideways normal. The macro outlook remains bearish, but NZD possibly still an attractive option for investors given the interest rate, and strength of the stock market. Wait for now.
  • Buy USD/CHF. Trend – MT is bull normal. The pair continues to grind higher. There is some talk of intervention by the SNB in preparation for more easing by the ECB in march. Like the pair much higher still, keep buying.
  • Buy EUR/CHF. Trend– MT is bull normal. My reversal thesis has not played out, and we are breaking out of a sideways MT on the weekly chart. I look for a long-term buy here, but will wait for some confirmation given the large daily hammer on Friday.
  • Wait USD/CAD. – MT is bull volatile. No sign of a bullish reversal yet in CAD after two weeks of selling. Still favor it as a long-term buy but need to wait. Oil is also bouncing so need to be cautious and see what is happening there.
  • Wait EUR/GBP. – MT is sideways normal. We are transitioning into a sideways normal MT. I think best to wait.
  • Wait AUD/JPY.   – MT is bear volatile. I think this pair could rise more this week, but the MT is tricky, unless you go to a lower timeframe. Possibly buy dips.
  • Wait NZD/JPY. – MT is bear volatile. Unless stocks continue to sell of this week, the pair should attract some flows.  Possibly buy dips.
  • Wait GBP/JPY.  – MT is bear volatile.  Wait for now, though this is possibly a long-term contrarian buy once risks to the pound settle down. Weekly charts show RSI oversold, Bullish piercing, off support. Tempting, but prefer USDJPY longs.
  • Buy EUR/JPY. Trend –  MT is bull fast. Look to buy, but lower conviction.
  • Wait CAD/JPY.  – MT is bear volatile. Wait for now, but possibly buy dips if oil continues to recover and stocks push higher.
  • Wait CHF/JPY. – MT is sideways normal. Wait for now.
  • Wait GBP/NZD. – MT is sideways normal. Stuck in the middle of the range for now.
  • Wait EUR/NZD. Trend – MT is sideways normal. As suggested last week, we turned sideways. Wait for now.
  • Buy AUD/NZD. – MT is bull normal. Pair pushing higher still, careful of a couple of little hammers. Buy on dips.
  • Wait EUR/AUD. – MT is bull volatile. Turning sideways. Wait for now.
  • Sell GBP/AUD. Breakout – MT is bear normal. Look to sell the breakout. Low conviction.
  • Wait AUD/CAD.  –  MT is sideways volatile. Wait for now.
  • Sell GBP/CAD. Trend –  MT is bear normal. Continue to sell.
  • Wait EUR/CAD.  –  MT is bull volatile. Wait for now. But there is a long-term contrarian selling opportunity here with a triple top in play.  I don’t mind it as think the EUR should be much lower fundamentally. This is a similar play to our CADCHF contrarian opportunity from last week.
  • Sell NZD/CAD. Breakout – MT is bear normal. Continue to sell.
  • Wait GBP/CHF. – MT is sideways normal. Wait for now.
  • Wait CAD/CHF.  – MT is sideways volatile. There is a major contrarian buy opportunity on the weekly charts. A double bottom, busted breakout and bullish engulfing week. (Same call as last week.
  • Wait NZD/CHF. – MT is sideways normal. Similar to CADCHF, contrarian buy here.
  • Wait AUD/CHF. – MT is sideways volatile. Wait for now. Long-term I like the pair higher still (as with NZD, CAD vs. CHF).

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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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