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.
- Waiting GBP/USD. – MT is sideways quiest. Sideways quiet market types typically lead to strong breakouts. There was an attempt on Friday after NFP to break lower but support held. Last week there was a broad based sell-off after the BOE disappointed the market on Thursday, but this should be a short-term pull-back as the BOE is still highly likely to raise rates this year.
- Waiting USD/JPY. – MT is sideways quiet. There was a breakout attempt earlier in the week but so far the range has held. As mentioned above sideways quiet market types present good opportunities to trade breakouts. The BOJ is currently monetizing Japans (huge) govt debt, demographics are poor and attempts to generate growth continue to fall flat. This combined with the increased chance of a fed lift-off in September and no major risk events on the horizon mean that you want to be trading the breakout to the long side. Interestingly we are sitting right on top of major monthly resistance at this price – just something to watch.
- Waiting AUD/USD. – MT is sideways normal. Last week we completed the transition into a sideways market type. This is on the back of a more upbeat than expected outlook from the RBA. Watch for a close above or rejection of .7450 for the next technical opportunity – a close above would turn the MT bullish while a rejection presents a shorting opportunity. Long-term the outlook for AUD is not pretty with falling commodity prices and China going though its own very serious issues, all of which will weigh heavily on the Aussie. The Fed should raise rates in September and the RBA will have to change it’s tune eventually… but for now trade with caution (Note: For longer-term shorts I see no reason to close here). One final thing – poor china data this weekend could weigh on the pair.
- Waiting EUR/USD. – MT is sideways normal. Sideways normal MT continues to persist. With Greece not causing any major issues, we should see the focus come back to the differing paths of the two central banks. Wait for price action to confirm.
- Waiting NZD/USD. – MT is sideways normal. Kiwi has put in a double bottom confirming the sideways MT. The milk action was terrible and Farmers are going to be making less than break-even on their payout from Fonterra. But the double bottom is suggestive, that for now, after such a strong downtrend, the sellers are just not there in enough numbers to begin the next leg down. Expect a choppy period with a potential move back towards 0.67 that will present the next selling opportunity
- Long USD/CHF. Trend – MT is bull normal. Stong bull trend continues with suggestions that the move is being supported by SNB selling (of the CHF). Be wary of resistance here. From a fundamental point of view remember you lose money by holding Swiss Francs as the interest rate is negative and you lose even more if the currency is moving against you. A lot of buyers should be feeling the pain just now.
- Long EUR/CHF. Trend – MT is bull normal. Strong breakout continues – See comments above on USDCHF.
- Long USD/CAD. Trend – MT is bull normal. We had poor jobs data out of CAD and oil is getting absolutely crushed. It’s possibly because we are sitting at major monthly resistance that we are not seeing the follow though on the pair that fundamentals might suggest. In saying that, with the bull normal MT is still intact and the opportunity is to buy this week.
- Waiting EUR/GBP. – MT is sideways normal. Choppy conditions continue so wait for now. Still favor the downside if anything as the high of the breakout week is still well in place.
- Waiting AUD/JPY. – MT is sideways normal. We have a weekly buy signal here, but with no major fundamental conviction on this pair prefer to wait as the daily sideways MT is still holding. Watch for an emergence of a new bull MT this week or a rejection of the top of the range as a selling opportunity.
- Waiting NZD/JPY. – MT is sideways normal. Wait for now.
- Waiting GBP/JPY. – MT is sideways quiet. Interesting price action with a bearish engulfing off a failed breakout in a sideways MT presenting a shorting opportunity last Thursday. But sideways MT still in play so wait for now.
- Waiting EUR/JPY. – MT is sideways quiet. Another sideways quiet MT (they are actually quiet rare on daily charts). Look for a breakout.
- Waiting GBP/NZD. – MT is sideways normal. Double top in place and sideways normal MT confirmed. Weekly charts have a bearish engulfing which generally you don’t want to get in the way of. Long-term traders will want to have taken decent profits here – but looking to buy back on a fall to 2.31.
- Waiting EUR/NZD. – MT is sideways normal. A weekly short candles stick pattern presents a selling opp for the contrarian but prefer to waif for a new bear MT to breakout.
- Waiting AUD/NZD. – MT is sideways volatile. Some wild rides for swing traders on this pair (as is typical in volatile MT’s). For longer-term traders best to wait. Interest rate differentials suggest a good buying opp if we get back to 1.09
- Waiting EUR/AUD. – MT is sideways volatile. Weekly candles suggest selling but with caution as the high at 1.5330 had not been taken out meaning the market could still target the supply sitting there. Tempting to look short but the risks too high.
- Waiting GBP/AUD. – MT is bull normal. Big key reversal week on the back of three news events. Not clear that the trend is over yet but caution advised.
- Waiting AUD/CAD. – MT is sideways volatile. Stay out for now.
- Long GBP/CAD. Trend – MT is normal bull. Continue to buy.
- Long EUR/CAD. Trend -MT is bull normal. Look to buy.
- Waiting NZD/CAD. – MT is bull normal. But sitting right on major resistance. wait for it to be cleared.
- Waiting CAD/JPY. – MT is sideways normal. Wait for now.
- Short CHF/JPY. Trend– MT is bear normal. Look short.
- Long GBP/CHF. Trend– MT is bull normal. Look to buy but we wary of the bearish engulfing off resistance.
Analysis to read:
Economic calendar for the week ahead:
(MT = Market Type: Click for more information on market types.)
(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. If you like Sam’s writing you can subscribe to his newsletter.
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