Forex Trading Opportunities for the Week Ahead 4 APR 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 normal. The GBP finished one of the weakest currencies, on the back of poor manufacturing data. We are sitting mid-range v. USD but there are some selling opportunities on the crosses where we are breaking out of the recent range.
  • Wait USD/JPY.   MT is sideways normal. The sideways normal MT continues to hold and we are getting near the crucial level of 111.00 where we may see intervention activities from the BOJ. Japanese stocks were down over 3.5% on Friday, may be leading to some risk-off flows. I am stalking a bearish breakout, if we can hold below 111.00. The approach will be to sell 50% on a breakout, with 50% on a retracement, but to get out immediately if there is a reversal right after entry. Small position only as we need to be wary of intervention, and will bracket with a GBPJPY short.
  • Buy AUD/USD. Trend –  MT is bull normal. Buying AUD continues to work, but again I suggest caution as candlestick price action shows we may be topping out. Data continues to be good out of Australia, and the RBA is expected to keep rates on hold next week, though in a overbought market any bearish rhetoric may cause a sell off. This is a possibility with the RBA likely unhappy with the AUD at these levels, preferring the pair to be trading at 65-70 cents. Watch for any mention of “a lower AUD seems both likely and necessary” in the rates announcement or an outside chance of a rate cut. Conversely if the RBA is hawkish or the market is brought up despite any jawboning, then it would be a strong sign that the bull trend is likely to continue. Also of note is the resumption of the downtrend in commodities last week.
  • Wait EUR/USD.  – MT is sideways volatile. The EUR is sitting at key levels vs. the USD. The formation of a spinning top suggests that mixed Euro Zone data and Friday’s unspectacular, yet not bad NFP are not providing any clear direction to traders. My longer-term base case for the EUR is below parity, but for now repatriation followed by a weak USD have been keeping the pair bid.  My approach for now is to wait, and to look for a confirmed break back below at least 1.1o before going short. Tactically, for short-term traders, if we push though 114.00 then the correct approach will be to buy. Of note is the comparative weakness of European stock markets.
  • Buy NZD/USD. Breakout – MT is bull normal. The Kiwi, is sitting at the key 69.00 level, and we have seen for formation of two indecisive candles. Next weeks dairy auction may be important in deciding future direction. It is also important to note that immigration, construction and tourism are supporting the economy, despite the weak dairy sector. A buy stop above the high on a positive dairy auction may be a good approach, otherwise wait for a confirmed move back below 0.6550 before looking to sell the pair.  Positions should be kept small as we need to remember this move is more based on US weakness more than NZD strength, and the RBNZ is in a rate cutting cycle.
  • Sell  USD/CHF. Trend– MT is bear normal. Despite the small hammer at the key 0.96 level the pair has continued to sell off. Continue short, but we can look for buying opportunities once USD sentiment changes back to bullish.
  • Wait EUR/CHF. – MT is sideways quiet. Chopping around mid range for now. I am stalking a bullish breakout above 1.1000
  • Sell USD/CAD. Trend – MT is bear normal. We had a bullish hammer on Thursday which lead to some temporary upside. This was undone on the back of NFP and perhaps more importantly some very strong Canadian manufacturing data. Oil has sold off again and if that continues we should see the pair chop around for a while. I maintain a slight bearish bias for now.
  • Buy EUR/GBP. Trend – MT is bull normal. The bull trend has resumed, so we can continue to buy for now.
  • Wait AUD/JPY.  – MT is sideways normal. Wait for now. Sitting at the key .86 level. We may see some action on this pair after RBA.
  • Sell  NZD/JPY. Reversal – MT is sideways normal. A little busted breakout in a sideways MT suggest sell.
  • Wait GBP/JPY. – MT is sideways quiet. I am staking a breakout below 157.50 which will trigger a short if confirmed. Sideways quiet MT is trends are high quality set-ups. The approach would be 100% at market with a stop above 162.00.
  • Wait EUR/JPY.  MT is sideways normal. Wait for now, with a bearish engulfing in a play.
  • Wait CAD/JPY. – MT is sideways normal. Wait for now, or aggressive shorts. Busted breakout in place.
  • Wait  CHF/JPY. – MT is sideways normal. Wait for now. Almost bull normal, but bearish candle formation suggests caution.
  • Sell GBP/NZD. Breakout – MT is bear normal. Sell as the bear market has resumed. Not much support in the way for a move back down to 1.9300
  • Wait EUR/NZD.  – MT is sideways normal. Wait for now.
  • Wait  AUD/NZD. – MT is sideways normal. The two weekly hammers mentioned last week, have lead to some downside. This is probably more of a buying opportunity than a reversal.
  • Wait EUR/AUD.  – MT is sideways quiet. We have another sideways quiet MT, I am stalking for a breakout, pending the RBA meeting.
  • Sell GBP/AUD. – MT is bear normal. Bottoming attempts have failed for now, continue to sell.
  • Wait AUD/CAD. –  MT is sideways quiet. Wait.
  • Wait GBP/CAD.  –  MT is sideways normal. Look for a breakout lower this week.
  • Wait EUR/CAD.  –  MT is sideways normal. Wait.
  • Wait NZD/CAD. – MT is sideways  normal. Wait.
  • Sell GBP/CHF. Trend – MT is bear normal. Bear market has resumed. Continue to sell.
  • Wait CAD/CHF.  – MT is sideways normal. Wait
  • Wait NZD/CHF. – MT is sideways normal. Wait.
  • Wait AUD/CHF. – MT is sideways normal. Wait.

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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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