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 DXY – MT is sideways volatile. Erratic data, culminating in a terrible jobs report on Friday has knocked the wind out of the sails of the USD. We now shift to a sideways volatile MT. Next, we wait for Yellen to confirm how the central bank views the weak number. Note that it is not all bad for the USD with some positive data out there.
- Wait GBP/USD. – MT is sideways normal. Brexit concerns continue to be the talk of the town for GBP traders, and the pair sold off from the top of the sideways MT last week. I would advise a great deal of caution heading into the Brexit vote. While my base case is that the UK does stay in the EU, there is a serious risk of a outlier event (think SNB removing the floor but not as big). The vote itself is not until 23rd of June, so it’s fine if you are a short-term/swing trader for now, but long term traders should already be planning ahead how they want their portfolio to look heading into the event.
- Sell USD/JPY. – MT is bear normal. The yen fell 500 pips last week, moving us back into bear MT territory. It is prudent to remember that the BOJ does not like fast moves, so the rapid fall increases the risk of intervention. My base case is there will be no intervention, but it pays to be cautious and keep position sizes small.
- Wait AUD/USD. – MT is sideways volatile. AUD started to bottom last week, though poor China data and tanking Iron Ore prices kept the pair under pressure. In the end, the Aussie was up on the back of the jobs report. The next focus will be RBA, where we can expect rates to be kept on hold. Given the volatile move on Friday it is best to wait for now.
- Wait EUR/USD. – MT is bear volatile. Draghi and the ECB did not have too much to say last week and are awaiting the outcome of the Brexit referendum. Of course, the main event for the week turned out to be NFP with the EUR shifting from bear normal to bear volatile. Best to wait for now.
- Buy NZD/USD. Trend – MT is bull fast. NZD was strong last week with improving dairy auction prices and then the job data. The NZ stock market continues to rise indicating that money is flowing into the country. You can look to buy, but stalk an entry on a lower time-frame, as fast MT’s can reverse quickly. But I issue this buy recommendation with a healthy dose or caution as the RBNZ may well cut rates next week. If they do we are likely to shift into a sideways volatile MT.
- Wait USD/CHF. – MT is bull volatile. Best to wait here for now, though short-term traders may like to sell the pair.
- Wait USD/CAD. – MT is sideways normal. CAD data was mixed last week with GDP coming in a little worse than expected. Oil rejected the key $50 and OPEC refused to issue a cap on oil production. I think best to wait for now.
- Wait EUR/GBP. Trend – MT is bear volatile. We have moved into volatile territory so best to wait. Moves are likely to be dictated by Brexit surveys/comments in the coming week.
- Wait EUR/CHF. – MT is sideways normal. Wait for now.
- Wait AUD/JPY. – MT is sideways normal. Look for a break of 78.00 for a shift to bear MT. Could be a good option if RBA is dovish.
- Wait NZD/JPY. – MT is sideways quiet. I like to stalk the breakout lower.
- Wait GBP/JPY. – MT is sideways normal. Wait for now.
- Sell EUR/JPY. Breakout – MT is bear normal. Breaking out into a bear MT. Look to sell. Could be a decent option.
- Sell CAD/JPY. Breakout – MT is bear normal. Breaking out, look to sell. A good option , but watch oil.
- Sell CHF/JPY. Breakout – MT is bear normal. Look to sell.
- Wait GBP/NZD. – MT is sideways volatile. Wait for now.
- Sell EUR/NZD. – MT is bear normal. Look to sell, but caution as we are still within the wider range.
- Wait AUD/NZD. – MT is sideways normal. Back at a major key level, which could be a buying opportunity worth stalking near here, particularly if RBNZ cuts rates.
- Wait EUR/AUD. – MT is sideways normal. Wait for now.
- Wait GBP/AUD. – MT is bull volatile. Wait for now.
- Wait AUD/CAD. – MT is sideways normal. Wait for now.
- Wait GBP/CAD. – MT is bull volatile. Wait for now.
- Wait EUR/CAD. – MT is sideways normal. Wait for now.
- Buy NZD/CAD. Breakout – MT is bull normal. Look to buy.
- Wait GBP/CHF. – MT is bull volatile. Wait for now.
- Wait CAD/CHF. – MT is sideways normal. Wait for now.
- Wait NZD/CHF. – MT is sideways normal. Wait for now.
- Wait AUD/CHF. – MT is sideways normal. 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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