Forex Trading Opportunities for the Week Ahead 4 Jun 18: FXRenew

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. While the uptrend remains in-tact, we can expect a period of consolidation around these levels. MT theory suggests a retest of 95.00 is likely, and before/after that a period of sideways movement. Four key points for the dollar. 1. The meeting in Singapore between President Trump and North Korean Leader Kim Jong Un is back on – this is risk positive. 2. Trade war fears continue to abound with the EU, Canada and Mexico the latest to have tariffs announced against them. They have announced retaliatory tariffs. 3. U.S. Bond yields fell on the back of euro-area political concerns, but the uptrend in yields has resumed. 4. NFP payrolls beat expectations both in the headline number and importantly in wage growth. The USD did not rise much on the back of this, which is indicative of a likely period of consolidation. As an aside Trump telegraphed the results early in a tweet saying he was looking forward to this mornings report. Hopefully he gets told not to do this again. Anyway, this result helps to confirm a second rate hike this year in the upcoming FOMC meeting.

• Sell GBP/USD. Trend – MT is bear normal. While we remain clearly within the bear MT and the correct strategy remains selling, some improvements in UK data may be helping the pair to form a temporary bottom. Watch for a move above 1.3450 to indicate that we may be moving into a sideways MT. Technically, I still expect us to eventually get down to 1.31.

• Buy USD/JPY. Reversal– MT is bull volatile. USDJPY was the main beneficially of the positive NFP result and a bullish reversal pattern has formed off the bottom of the sideways MT. We also have a weekly bullish hammer in play. Despite geopolitical risk, stocks are performing well with the NASDAQ up 1.5% on Friday. A weekly bearish pin candle has formed on US Bonds indicative of more downside, or at least an end to the recent bounce. These factors support the buy call in USDJPY,

• Wait AUD/USD. –  MT is sideways normal. The technical base discussed in this report has continues to play out and we are in a sideways MT. Weaker data has not helped the AUD this week, but of note, the pair remains near the top of the range. A break above 0.76 pushs us into a bull MT and offers a decent technical buying opportunity. This may be best expressed on the crosses. RBA this week and rates are likely to remain on hold. Of course the language of the accompanying report will be scrutinized but it is likely to remain accomodative.

• Sell EUR/USD. Trend –  MT is bear normal. There was a blow-out in Italian bond yields over fear a euro-skeptic finance minister would be appointed as part of the new Italian government. This did not come to pass and things settled down somewhat. There are still risks for the EUR though, with the populist parties forming a large part of the government. Watch this space. The Eurozone was also hit with the ousting of the Spanish Prime Minister over Illegal use of a campaign slush fund and US tariffs on EU products. These things will weigh on the EUR and force the ECB to remain highly accomodative for longer.

• Sell NZD/USD. Trend –  MT is bear normal. The Kiwi has also moved into a sideways MT, but technically we can expect an eventual move back towards support at 0.68. A break above 0.7050 may put paid to this thesis. The RBNZ remains dovish and would be happier with the exchange rate lower rather than higher.

• Sell USD/CHF. Trend – MT bear normal. Risk off and deep selling of EURCHF off the key 120 figure over EU political concerns have driven USDCHF into a bear market type. I prefer to look for opportunities to buy CHF vs. the crosses.

• Wait USD/CAD. – MT is sideways normal. A tumultuous week for the Candian dollar saw the breakout discussed in last weeks report fail. This was on the back of a more hawkish than expected BOC. But the pair is back towards the top of the range after poor data and NAFTA issues/US tariffs. Note that Oil continues to slide. Wait for now.

• Wait EUR/GBP.  – MT is bull normal. We are stuck mid-range of the weekly sideways quiet MT. Wait for now.

Crosses

• Sell EUR/CHF. Trend – MT is bear normal. Continue to sell.
• Wait AUD/JPY.  – MT is sideways volatile. Wait.
• Buy NZD/JPY. Reversal– MT is sideways volatile. Contrarian buy off key support.
• Sell GBP/JPY.  Trend – MT is bear normal. Continue to sell.
• Sell EUR/JPY. Trend – MT is bear normal. Continue to sell.
• Wait CAD/JPY.  – MT is sideways volatile. Wait.
• Wait CHF/JPY.  – MT is sideways volatile. Wait.
• Sell GBP/NZD. Trend – MT is bear normal. Look to sell.
• Sell EUR/NZD. Trend – MT is bear normal. Continue to sell.
• Wait AUD/NZD. – MT is bull volatile. Wait.
• Sell EUR/AUD. Trend – MT is bear normal. Continue to sell.
• Sell GBP/AUD. Trend – MT is bear normal. Continue to sell.
• Buy AUD/CAD. Trend – MT is bull normal. Continue to buy.
• Sell GBP/CAD. Trend –  MT is bear normal. Continue to sell.
• Sell EUR/CAD. Trend – MT is bear normal. Continue to sell.
• Wait NZD/CAD. – MT is sideways volatile. Wait.
• Sell GBP/CHF. Trend – MT is bear normal. Continue to sell.
• Sell CAD/CHF. Trend – MT is bear normal. Look to sell.
• Sell NZD/CHF. Trend – MT is bear normal. Look to sell.
• Wait AUD/CHF.  – MT is sideways quiet. Wait.

Other Markets

• Wait USDSGD  – MT is sideways normal. Wait.
• Buy USDCNH Trend – MT is bull normal. Continue to buy.
• Sell Gold.  Trend – MT is bear normal. Continue to sell.
• Sell Oil. Trend – MT is bear normal. Continue to sell.
• Wait S&P 500.  – MT is sideways quiet. Wait.
• Wait DAX.  – MT is sideways volatile. Wait.
• Wait Nikkei. – MT is sideways normal. Wait
• Wait T-Notes.  – MT is sideways volatile. 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.