Forex Trading Opportunities for the Week Ahead 20 Mar 17

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. 

• Sell DXY  Trend – MT is bear normal. While the DXY is still holding above the key 100 level, we have shifted into a bear normal MT. Counter-intuitively this is on the back of a .25 interest rate hike by the FED. Markets were expecting a hawkish tone to Yellen’s comments but when no real change to the outlook was made the dollar sold off heavily across the board. We can still expect 3 rate hikes this year, so I suspect the sell off will prove to be temporary. Look to sell below 90.80 this week.

• Wait GBP/USD. – MT is bear volatile. The Pound was bought first on the back of FOMC and then on surprisingly hawkish comments from the BOE. While there is little chance of a rate hike in the near-term one member did argue that rates should be raised now. Watch to see how the price responds to the imminent triggering of article 50.

• Wait USD/JPY. – MT is sideways normal. The pair was sold on the back of FOMC as last week’s busted breakout played out. The BOJ offered nothing new and with US bonds rising post FOMC we can expect the pair to trade down toward 111.60 support. If the sell-off persists then there is not much support in the way so shorting would be appropriate. Sell below 111.20.

• Wait AUD/USD. –  MT is sideways volatile. The Aussie rose strongly on the back of the FOMC announcement, and considering we have a relatively optimistic RBA and a recovery in metal prices, the AUD may prove to be a popular choice in the coming week. This market type suits short term traders.

• Buy EUR/USD.  Trend –  MT is bull normal. The euro broke out into a bull MT after FOMC and the “loss” by the populist anti-euro party in the Dutch elections. But the pair may be challenged by uncertainty around the French elections with a sell-off on Friday on the back of Le Pen leading in the polls. Watch closely to see if sentiment focuses on this. Look to buy this week, with caution.

• Sell NZD/USD. Trend –  MT is bear normal.  We are just holding onto the bear MT in the kiwi, but given the volatility be careful of a change. The Kiwi remains pressured by poor data and a dovish RBNZ. Look to sell but wait for a clear reversal pattern.

• Sell USD/CHF.  Trend – MT is bear normal. We have flipped into a bear MT after FOMC. EURCHF is very volatile suggestive of some form of intervention. This may be a better option to sell than buying EUR as if there are election worries, CHF should strengthen on safe haven flows where as the EUR will struggle with the uncertainty.

• Wait USD/CAD. – MT is bull volatile. Oil remains pressured and there are concerns around BOC dovishness. Wait for now.

• Wait EUR/GBP. – MT is bull normal. While we have a bull normal MT, with cable strength developing and given the technical picture, I suggest it is best to wait for now.

Crosses

• Wait EUR/CHF.  – MT is bull volatile. Wait.
• Wait AUD/JPY.  – MT is sideways normal. Wait.
• Sell NZD/JPY.  Trend – MT is bear normal. Continue to sell.
• Wait GBP/JPY.  – MT is sideways quiet. Look for a break of 138.00 to sell the pair or 141.60 to buy the pair. 
• Buy EUR/JPY. Trend – MT is bull normal. Look to buy, but be cautious of a change in MT here.
• Wait CAD/JPY. – MT is sideways quiet. Sell below 83.80.
• Sell CHF/JPY. Reversal – MT is sideways normal. Doji off the top of the range presents selling opportunity.
• Buy GBP/NZD. Trend – MT is bull normal. Continue to buy.
• Buy EUR/NZD. Trend – MT is bull normal. Continue to buy, but with caution.
• Buy AUD/NZD. – MT is bull normal. Continue to buy.
• Buy EUR/AUD. Trend – MT is bull normal. Look to buy, but with caution
• Wait GBP/AUD. – MT is sideways normal. Wait.
• Buy AUD/CAD. Trend –  MT is bull normal. Continue to buy.
• Buy GBP/CAD. Breakout –  MT is bull normal. Look to buy above 165.60.
• Buy EUR/CAD. Trend –  MT is bull normal. Continue to buy.
• Wait NZD/CAD. – MT is sideways normal. Wait.
• Wait GBP/CHF.  – MT is sideways normal. Wait.
• Sell CAD/CHF.  Trend – MT is bear normal. Continue to sell.
• Sell NZD/CHF. Trend – MT is bear normal. Look to sell, but with caution.
• Wait AUD/CHF. – MT is sideways normal. Wait.

Other Markets

• Wait Gold. – MT is bear volatile. Wait for now.
• Sell Oil. Trend – MT is bear normal. Look to sell.
• Buy S&P 500. – MT is sideways quiet. Wait for now. Trade a break above 2390.
• Wait T-Notes – MT is bear volatile. Wait for now.

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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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