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 GBP/USD. Reversal– MT is sideways volatile. BOE was quite dovish last week and job numbers out of the US were solid (despite the headline miss, underlying data was robust). We are in a sideways MT and the formation of an evening star pattern suggests a sell.
- Wait USD/JPY. – MT is sideways volatile/extreme. The price action here is significant. Despite both decent job numbers and the introduction of negative rates by the BOJ, the weekly bullish reversal pattern mentioned two weeks ago has failed. I take it as quite a bearish signal, when both positive price action and a positive catalyst fail so convincingly. We also see a number of failed bullish reversal patterns on equity markets, meaning sentiment remains risk-off (USDJPY bearish). Trading a break below 115.75 the preferred approach.
- Wait AUD/USD. – MT is sideways normal. Bearish data out of Australia, along with a reasonably dovish monetary policy statement by the RBA pressure the pair. News out of China remains troublesome and I expect the situation to worsen. There has bee a slight bounce in iron ore prices but they still remain in a well-entrenched downtrend. A big bearish engulfing here should lead to some downside.
- Buy EUR/USD. Trend – MT is bull fast. I continue to like this pair short and prefer to wait for a shorting opportunity, but for short-term traders MT analysis suggests a buy. Longer-term I think we are heading much lower, based on the divergence theme, slowing global growth, and I think that the EURO will start to sell off on risk-off once repatriation finishes… being patient for now. Also note that in bull fast MT’s the reversals can be sudden (see AUDNZD last week as an example).
- Wait NZD/USD. Trend – MT is sideways volatile. The macro outlook remains bearish. A bearish engulfing candle suggests we may see the pair sell off from here.
- Sell USD/CHF. Trend – MT is bear fast. MT switched direction in the space of a week (not normally seen), so it may be best to be patient and sell rallies. Low conviction for me.
- Wait EUR/CHF. – MT is bull volatile. A second hammer plus a long bearish candle turns us bull volatile. Importantly there is a weekly doji/hammer. Wait for now, and if long make sure you have taken some profits.
- Buy USD/CAD. – MT is sideways volatile. USDCAD has found support at the 138 key level. A hammer follow by a bullish engulfing, combined with some bearish days in oil, and a sell off in equities suggest that there is a buying opportunity. The risk/reward is decent targeting a move back towards 1.47. But a bit of a risky trade in this market type though.
- Wait EUR/GBP. – MT is sideways normal. Small bearish hammer near the top of the range suggest that the sideways MT could continue.
- Wait AUD/JPY. – MT is sideways volatile. Bearish engulfing week suggests a sell though we are near the middle of the range. Would like to call this a sell, but does not quite meet my entry criteria. One to stalk.
- Wait NZD/JPY. – MT is sideways volatile. Price pattern and risk/reward suggest this may be a better short option than AUDJPY
- Wait GBP/JPY. – MT is bear volatile. Another busted breakout that has failed with an (almost) bearish engulfing week. Longer-term short I think.
- Wait EUR/JPY. – MT is sideways volatile???. There are a few options available for this MT, so when it is this tricky to pick I like to stay out. My gut tells me short.
- Sell CAD/JPY. Reversal – MT is sideways volatile. Back into selling mode with a bearish engulfing week. A trade idea would be to go short on the open with a stop above the weekly marbuzo line.
- Wait CHF/JPY. – MT is sideways normal. Wait for now.
- Buy GBP/NZD. Reversal – MT is sideways normal. A busted breakout with a bullish piercing pattern. If risk-off continues there is an opportunity for this pair to head back towards 2.36 or higher. I like a contrarian trade on the GBP because I think Brexit fears will subside and the UK has one of the better performing economies.
- Wait EUR/NZD. Trend – MT is sideways normal. Wait for now.
- Wait AUD/NZD. – MT is bull volatile. The little hammers we talked about saw the pair come of heavily last week. Long-term still like it as a buy on converging interest rate differentials.
- Wait EUR/AUD. – MT is sideways normal. Wait for now.
- Wait GBP/AUD. – MT is sideways normal. Last weeks breakout failed. Wait for now.
- Wait AUD/CAD. – MT is sideways volatile. Wait for now.
- Wait GBP/CAD. – MT is bear normal. Some bottoms signs, so probably best to wait.
- Wait EUR/CAD. – MT is bull volatile. Bullish engulfing week cancels the contrarian opportunity mentioned last week. Wait for now.
- Wait NZD/CAD. – MT is bear normal. Turning sideways, best to wait.
- Wait GBP/CHF. – MT is sideways normal. Wait for now.
- Wait CAD/CHF. – MT is sideways volatile. Busted breakout higher, lead to a good shorting opp last week. Now mid range but expect the pair to head lower. Contrarian opp mentioned last week now cancelled.
- Wait NZD/CHF. – MT is sideways normal. Wait for now.
- Wait AUD/CHF. – MT is sideways volatile. Wait for now.
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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.
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