Forex Trading Opportunities for the Week Ahead 17 Apr 17

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 sideways normal. Previously, we mentioned the busted breakout and bullish engulfing week off the key 100 level are suggestive of a resumption in the longer-term uptrend in the USD. This pattern is still of relevance but we have some conflicting forces at work. There is growing skepticism of President Trump’s ability to push through on the planned reforms, additionally he has attempted to jawbone down the currency and suggested that rates should remain low (in contrast to his previously stated position). This means that while will should still see rate hikes this year in the US, there is a chance that he is will install more doves in the Federal Reserve. This should keep hikes at a steady but slow pace. Other forces impacting the dollar are risk aversion on the back of issues with Russia (related to the bombing in Syria), a further bombing in Afghanistan and tension with North Korea. These factors should see safe haven flows benefiting the USD. My favored approach would be a buy above 101.60. 

• Wait GBP/USD. – MT is sideways normal. The GBP remains strong on the back of good data. Positioning remains oversold and with Brexit concerns on the back foot for now we can look to buy above 1.2660.

• Sell USD/JPY. Trend – MT is bear normal. We have seen risk aversion intensify in the last week and selling USDJPY continues to be the correct strategy. Treasuries are breaking out to the upside which also adds to the bearish case for the pair.

• Wait AUD/USD. –  MT is sideways volatile. We had a bullish reversal pattern form off the bottom of the range, which lead to some immediate upside. This was on the back of better than expected employment and China data. But caution is required in this risk adverse environment. Additionally, Iron Ore has sold off heavily which should weigh on the pair.

• Wait EUR/USD.  –  MT is sideways volatile. Despite a bounce last week on Trump comments, the EUR is struggling on concerns around an increasingly uncertain French election outcome. The first round of voting is next week and we can expect the uncertainly to continue to dampen the EUR outlook.  Look to sell below 1.0535.

• Wait NZD/USD. –  MT is sideways normal. The Kiwi found support in sympathy with the AUD last Wednesday. But we can expect risk aversion to harm any bullish prospects for the pair now. There is a dairy auction this week to take note of.

• Wait USD/CHF.  – MT is sideways volatile. The Swiss Franc should benefit from risk aversion, but we are stuck mid range for now so best to wait.

• Wait USD/CAD. – MT is sideways normal. After attempting to breakout to the downside last Wednesday, the pair reversed and formed a bullish engulfing day. While this is suggestive of some upside, it is a weak signal so I suggest waiting for now.

• Sell EUR/GBP. Trend– MT is bear normal. The bear MT continues in the pair and we can look for a move toward .84 and then .83.

Crosses

• Sell EUR/CHF.  Breakout– MT is bear normal. Sell below 1.0650
• Sell AUD/JPY. Trend – MT is bear normal. Continue to sell.
• Sell NZD/JPY.  Trend – MT is bear normal. Continue to sell.
• Sell GBP/JPY.  Trend – MT is bear normal. We got our break of 137.00 and can continue to sell.
• Sell EUR/JPY. Trend – MT is bear normal. Continue to sell.
• Sell CAD/JPY. Trend – MT is bear normal. Continue to sell.
• Sell CHF/JPY. Trend – MT is bear normal. Continue to sell.
• Buy GBP/NZD. Trend – MT is bull normal. Continue to buy.
• Sell EUR/NZD. Breakout – MT is bear normal. Look to sell.
• Wait AUD/NZD. – MT is sideways normal. Wait.
• Wait EUR/AUD. – MT is sideways normal. Wait.
• Buy GBP/AUD. Trend – MT is bull normal. Continue to buy.
• Wait AUD/CAD. –  MT is bear volatile. Wait for now.
• Buy GBP/CAD. Trend–  MT is bull normal. Continue to buy, but be careful here as we look to be turning sideways.
• Wait EUR/CAD. –  MT is bear normal. But price action suggests caution.
• Wait NZD/CAD. – MT is sideways normal. Wait.
• Buy GBP/CHF.  Trend – MT is bull normal. Continue to buy.
• Wait CAD/CHF.  – MT is sideways normal. Wait.
• Wait NZD/CHF. – MT is sideways normal. Wait.
• Wait AUD/CHF. – MT is bear volatile. Wait.

Other Markets

• Buy Gold. Trend – MT is sideways normal. Gold is rising on risk aversion. Look to buy.
• Buy Oil. Trend – MT is bull normal. Look to buy, but careful of a sell-off after this sharp rise.
• Sell S&P 500. Breakout – MT is bear normal. Look to sell.
• Wait DAX. – MT is sideways normal. Wait.
• Buy T-Notes Trend– MT is bull normal. Last weeks busted breakout has failed on the back of risk aversion. Look to buy.

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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. 

by Sam Eder | Apr 15, 2017 – 5.32 am

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.