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.
- Buy DXY. Trend – MT is bull normal. Not much has changed in terms of the drivers from last week. Sentiment has been focused on risk-off regarding the financial issues in Turkey which saw USD gain until the last two days of the week when Qatar stepped in to aid Turkey’s situation. This is far from over yet. On the trade front, there are some talks going on this coming week between China and the US, with a view to a potential summit between the two leaders. Meanwhile the US will continue to implement its proposed tariffs on 16 billion of goods with 200 billion more in the pipeline. Lastly, the divergence theme continues to support the USD and we can expect Powell to reiterate the hawkish picture as Jaskson Hole on Friday. There is a 90% chance of a hike in September now priced in. Continue to buy USD.
- Sell GBP/USD. Trend – MT is bear normal. Despite a raft of positive data last week GBP was not able to find any traction. Selling off on positive data is usually quite a bearish sign. Sentiment is certainly focused on Brexit with the risks of a hard Brexit increasing. Q4 is the end game for an agreement to be made and even if one does happen there is likely to be brinkmanship and posturing until the last minute so sentiment will probably remain negative.
- Wait USD/JPY. – MT is sideways normal. The pair is benefiting from risk-off flows both with regards to the China/US trade spat and the Turkey situation. Risk-off is winning over monetary policy divergence at this point in time and we remain range bound. Japanese data has not been great. Wait for now.
- Sell AUD/USD. Trend– MT is bear normal. The Aussie is retesting support turned resistance at 0.7300 and if we push higher on Monday it could knock us out of the bear MT. While AUD has been selling off on negative risk sentiment, data has been decent and trade talks between the US and China are back on the table. Additionally, the RBA is relatively upbeat these days. But if the USD does continue its broad based rise on Monday then expect the the bear MT to resume.
- Sell EUR/USD. Trend – MT is bear normal. Risk-off concerns around Turkey and contagion continue to drive the pair lower. There was a bounce on Friday but no clear driver so this may well be some profit taking and with no bottom in place the probability is with the trend resuming. Continue to sell.
- Sell NZD/USD. Trend – MT is sideways quiet. The Kiwi bounced on Friday on the back of some positive data and China trade talks with the US. Aside from that the recent move is driven both by risk-off and a more dovish than expected RBNZ. No clear bottom is in place and we can expect the bear MT To continue despite Fridays bounce.
- Wait USD/CHF. – MT sideways quiet. CHF, like the Yen remains range bound, with risk-off flows supporting the currency. Note that the SNB has been in the newswires talking down the CHF.
- Wait USD/CAD. – MT is sideways normal. The pair has moved back into a sideways MT. Data continues to surprise to the upside and we have positive NAFTA talk too. Oil prices remain under pressure but not greatly so. I continue to like buying CAD vs. the crosses.
- Wait EUR/GBP. – MT is bull normal. Despite the positive data out of the UK Brexit sentiment is keeping a lid on any GBP gains. Chances are that unless we positively clear .90 then we will consolidate around this level for a while.
Crosses
- Sell EUR/CHF. Trend – MT is bear normal. Continue to sell.
- Wait AUD/JPY. – MT is bear normal. Minor double bottom in place. Wait.
- Wait NZD/JPY. – MT is bear normal. Minor double bottom in place. Wait.
- Sell GBP/JPY. Trend – MT is bear normal. Continue to sell.
- Wait EUR/JPY. – MT is bear normal. Minor double bottom in place. Wait.
- Wait CAD/JPY. – MT is sideways normal. Wait or buy.
- Sell CHF/JPY. Trend – MT is bear normal. Look to sell.
- Wait GBP/NZD. – MT is sideways normal. Wait.
- Wait EUR/NZD. – MT is sideways volatile. Wait.
- Buy AUD/NZD. Trend – MT is bull normal. Continue to buy.
- Sell EUR/AUD. Trend – MT is bear normal. Continue to sell.
- Sell GBP/AUD. Trend – MT is bear normal. Continue to sell.
- Sell AUD/CAD. Trend – MT is bear normal. Continue to sell.
- Sell GBP/CAD. Trend – MT is bear normal. Continue to sell.
- Sell EUR/CAD. Trend – MT is bear normal. Continue to sell.
- Sell NZD/CAD. Trend – MT is bear normal. Continue to sell.
- Sell GBP/CHF. Trend – MT is bear normal. Continue to sell.
- Wait CAD/CHF. – MT is sideways normal. Wait.
- Wait NZD/CHF. – MT is bear normal. Minor double bottom in place. Wait.
- Sell AUD/CHF. Trend – MT is bear normal. Look to sell.
Other Markets
- Buy USDSGD. Trend – MT is bull normal. Continue to buy.
- Wait USDCNH. – MT is bull volatile. Wait.
- Sell Gold. Trend – MT is bear normal. Continue to sell.
- Wait Oil. – MT is sideways normal. Wait.
- Buy S&P 500. Trend – MT is bull normal. Continue to buy.
- Sell DAX. Trend – MT is bear normal. Look to sell.
- Sell Nikkei. Trend – MT is bear normal. Look to sell.
- 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.