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.
- Buy DXY. Reversal – MT is sideways volatile. We got the reversal outlined in last weeks report and we can expect the price to move towards 90.50. The main fundamental driver remains rate hike expectations with the possibility of 4 rate hikes this year being tabled. For this reason new Fed Governor Jerome Powell’s testimony with congress this coming week will be eagerly watched for guidance. A hawkish statement should propel the dollar higher while a dovish statement will keep the DXY range bound.
- Wait GBP/USD. – MT is sideways volatile. Brexit concerns continue to trouble the GBP, despite some OK data. We remain in a consolidative phase.
- Sell USD/JPY. Trend – MT is bear normal. After the anticipated bounce followed the prior Friday’s hammer, the pair has resumed the sell-off after rejecting support turned resistance at at 107.50. We can continue to sell, though it pays to be cautious considering the ongoing recovery in stocks.
- Sell AUD/USD. Trend – MT is bear normal. The sell-off in the Aussie resumed last week, given the benign RBA and the prospects of several rate hikes this year in the US. The recovery in stocks continues but has not offered much support to the AUD in the last week. Keep selling.
- Sell EUR/USD. Reversal – MT is sideways normal. Last weeks reversal pattern played out and we can expect a move back to 1.22. Note, EU data remains positive so if we get a bout of USD weakness then the 1.22 level should hold. In saying that there are some political risks which could weigh on the EUR. In Germany there is a vote about the acceptance of the new coalition government from party members which has a reasonable chance of failure. There is also the Italian election next weekend which could weigh on the pair.
- Wait NZD/USD. – MT is sideways normal. The Kiwi looks to be weakening here, with a minor double top in place. This is despite some better retail sales data. When a pair sells off on good news it tends to be quite a bearish sign and we can expect a move back toward 0.72.
- Wait USD/CHF. – MT sideways normal. We got the anticipated move back into a sideways MT. With the bounce in stocks and the prospect of several rate hikes this year the the USD, it’s not surprising that momentum is running out.
- Buy USD/CAD. Trend – MT is bull normal. While we remain in the bull MT, the rejection of 1.27 does offer come concern. Good inflation data was the driver of the sell off on Friday. Buying still remains the correct strategy but we want to see some bullish price action first.
- Wait EUR/GBP. – MT is sideways normal. We remain firmly back within the range. Note we have developed a weekly sideways quiet MT, when these breakout, they tend to lead to a strong move. Wait for now and stalk the breakout.
Crosses
- Sell EUR/CHF. Trend – MT is bear normal. Continue to sell.
- Sell AUD/JPY. Trend – MT is bear normal. Continue to sell.
- Sell NZD/JPY. Trend – MT is bear normal. Continue to sell.
- Sell GBP/JPY. Trend – MT is bear normal. Continue to sell.
- Sell EUR/JPY. Trend – MT is bear normal. Continue to sell.
- Sell CAD/JPY. Trend – MT is bear normal. Continue to sell.
- Wait CHF/JPY. – MT is sideways volatile. Wait.
- Wait GBP/NZD. – MT is sideways normal. Wait.
- Wait EUR/NZD. – MT is sideways normal. Wait.
- Sell AUD/NZD. Trend – MT is bear normal. Continue to sell.
- Wait EUR/AUD. – MT is bull normal. But careful of the topping action here at resistance.
- Buy GBP/AUD. Trend – MT is is bull normal. Continue to buy.
- Wait AUD/CAD. – MT is sideways normal. Wait.
- Buy GBP/CAD. Trend – MT is bull normal. Continue to buy.
- Buy EUR/CAD. Trend – MT is bull normal. Continue to buy.
- Buy NZD/CAD. Trend – MT is bull normal. Continue to buy.
- Wait GBP/CHF. – MT is sideways normal. Wait.
- Sell CAD/CHF. Trend – MT is bear normal. Continue to sell.
- Wait NZD/CHF. – MT is sideways normal. Wait.
- Sell AUD/CHF. Trend – MT is bear normal. Continue to sell.
Other Markets
- Wait USDSGD – MT is sideways normal. Wait.
- Wait USDCNH – MT is sideways normal. Wait
- Wait Gold. – MT is sideways normal. Wait or contrarian sell.
- Wait Oil. – MT is bear volatile. Wait.
- Wait S&P 500. – MT is sideways volatile. Wait.
- Wait DAX. Trend – MT is bear normal. Continue to sell, but with caution.
- Sell Nikkei. Trend – MT is bear normal. Continue to sell, but with caution
- Sell T-Notes. Trend – MT is bear normal. Continue to sell.
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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.