Forex Trading Opportunities for the Week Ahead 28 MAR 16

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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 volatile. Brexit concerns and a stronger USD continue to pressure the pair. I prefer to watch for a potential head and shoulders bottom, but further downside should also not surprise. Overall, with the price being mid range mid range with my base case for the brexit vote being stay, I don’t think selling is a great risk/reward play. Wait for now.
  • Wait USD/JPY.   MT is sideways normal. Technically, we have a busted breakout with a “three white soldiers” candlestick pattern and divergence on the stochastics. It is important to note that this price action is in response to BOJ “activity” around the 110 handle.  This suggests that further downside may be limited for now, but if we do get risk-off and a break lower then I still favor the pair much lower. Conversely if we do get a breakout higher with the pair ignoring bearish news then it could be a decent buying opportunity. Wait and trade a break either way, but my intuition does prefer the downside. The best buying opportunity will come after the next leg lower.
  • Buy AUD/USD. Trend –  MT is bull normal. While market type analysis suggests buying, I would advise keeping positions small now. Technically, we have a failed bullish hammer on Friday, and choppy price action as might be expected after the strong run up. Additionally, Gold and the ASX have registered bearish weekly engulfing candles, so AUD strength on the back of the rises in these assets classes may start to reverse. The RBA is likely to keep rates on hold for now which is positive for investors, though they would prefer the rate to be .6500 rather than .7500.
  • Wait EUR/USD.  – MT is sideways volatile. It seems that the Fed is likely to resume it’s tightening cycle in the next quarter, which has lead to some USD strength. There is no real reason for them not to, with US stocks (which they care about far too much) near the high. Of course, this tightening is bearish stocks markets, so there is a bit of a feedback loop going on. I still prefer EURUSD much lower, but best to wait in this MT.
  • Wait NZD/USD. – MT is sideways normal. Global pressures and a dovish central bank are being offset by capital flowing in China, a boom in tourism and net migration at the greatest rate since 1974 (unconfirmed). Overall my belief is that with the Fed tightening, the former bearish factors will end up outweighing the latter bullish ones, particularly if we get a sell off in stocks. For now wait.
  • Wait USD/CHF. – MT is sideways normal. We have bounced off support and I continue to prefer to look for buying opportunities.
  • Wait EUR/CHF. – MT is sideways normal. Chopping around mid range for now, look to buy if we get back toward 1.08, or on a breakout higher.
  • Sell USD/CAD. Trend – MT is bear normal. The rapid sell-off in USDCAD continued last week. Oil was down last week, though a bullish hammer on Friday may signal the uptrend is going to continue. We must be cautious of this hammer as it formed on a holiday, so watch for confirmation next week. CAD showed some divergence from the price of oil last week as well so caution advised for bears now.
  • Wait EUR/GBP. – MT is sideways normal. A little busted breakout in this sideways MT suggest some topping in the pair. Possible sell but it’s a bit risky.
  • Wait AUD/JPY.  – MT is sideways normal. Wait for now.
  • Wait NZD/JPY. – MT is sideways normal. Wait for now.
  • Wait GBP/JPY. – MT is sideways normal. Wait for now.
  • Wait EUR/JPY.  MT is sideways normal. Wait for now.
  • Wait CAD/JPY. – MT is sideways normal. Wait for now.
  • Wait  CHF/JPY. – MT is sideways normal. Wait for now.
  • Wait GBP/NZD. – MT is sideways normal. Wait for now.
  • Wait EUR/NZD.  – MT is sideways normal. Wait for now.
  • Wait  AUD/NZD. – MT is sideways normal. Some topping action here with two weekly hammers in place. Wait or contrarian shorts.
  • Wait EUR/AUD.  – MT is sideways normal. Wait for now.
  • Wait GBP/AUD. – MT is sideways normal. Another “three white soldiers” off a key level to add to the previous bullish engulfing weeks indicate that we may be bottoming here.
  • Wait AUD/CAD. –  MT is sideways normal. Wait.
  • Wait GBP/CAD.  –  MT is sideways normal. Some bottoming signs here too.
  • Wait EUR/CAD.  –  MT is sideways normal. Wait.
  • Wait NZD/CAD. – MT is bear normal. Keep going short.
  • Wait GBP/CHF. – MT is sideways normal. A little double bottom forming here, but a bit tenuous.
  • Wait CAD/CHF.  – MT is sideways normal. Wait
  • Wait NZD/CHF. – MT is sideways normal. Wait.
  • Wait AUD/CHF. – MT is sideways normal. Careful of double top forming.

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Economic calendar for the week ahead:

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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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