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.
Majors
- Wait DXY – MT is sideways volatile. The DXY staged a minor recovery at the end of last week and we remain in the sideways MT. The key USD driver remains the timing of the next rate hike. Watch for a que from the FOMC statement and then Yellen’s press conference this coming week. Also of note is the weakness in US bond yields (meaning investors earn more carry when selling USD vs. other currencies) which is bearish USD. Technically I expect the dollar index to grind it’s way back towards 100, unless we get a sustained break of the low at 92.
- Sell GBP/USD. Breakout – MT is bear normal. The GBP broke the key 143 level and shifted into bear MT territory on the back of Brexit concerns. This was despite a flurry of good data from the UK. Selling on positive data is a very bearish sign and GBP presents a good tactical shorting opportunity. Of course you need to plan to have your shorts closed well before the June 23rd referendum.
- Sell USD/JPY. Trend – MT is bear normal. We are holding onto a bear normal MT, but a small hammer suggests we should be applying a fair amount of caution. Note that this pause in the decent of the yen makes it more difficult for Japanese officials to intervene. They are concerned about volatility/ speed of moves, more than the actual price. We have BOJ monetary policy announcement on the 16th.
- Wait AUD/USD. – MT is sideways normal. The RBA showed little intent to cut rates in last weeks meeting. We are close to a bull MT and I like buying AUD at the moment, though perhaps more against the crosses than the USD. Watch out for China data and risk-off in stocks though.
- Wait EUR/USD. – MT is sideways volatile. We had a technical sell in a sideways volatile MT with a bearish engulfing candle off resistance near the upper Bollinger Band on Thursday. We can expect the pair to now move back towards 1.10. We need to be careful of FOMC which could put paid to this technical move with dovish comments. Not much market moving data for the EUR next week and the ECB will remain quiet in anticipation of the Brexit Referendum. ECB is beginning some stimulus programs and it will be interesting to watch their impact.
- Buy NZD/USD. Trend – MT is bull fast. Kiwi continued to rocket up last week after hawkish RBNZ comments. Keep stops tight as we could see gains evaporate quickly in this MT.
- Sell USD/CHF. Trend – MT is bear normal. But I issue this call with caution as we have the SNB this week, where they are likely to reiterate that they are unhappy with CHF strength.
- Buy USD/CAD. Reversal – MT is bear normal. I am going to call this a buy as we have a little bit of a bottoming formation in place on the lower timeframes, and more importantly we have a bearish doji in oil after a rejection of the key $50 level. Buy on a break above 1.28, looking for a move back to 1.32.
- Wait EUR/GBP. – MT is sideways volatile. Best to wait for now. We have some signs of topping, but given the bearish outlook for GPBUSD I would hesistate to be buying GBP here.
Crosses
- Wait EUR/CHF. – MT is bear fast. A rapid fall in EURCHF could result in a buying opportunity near these levels depending on what the SNB says.
- Wait AUD/JPY. – MT is sideways quiet. Wait for now, and stalk a break below .78, but only if accompanied by risk-off in stocks.
- Buy NZD/JPY. Trend – MT is bull normal. Buy but with caution as we remain within the wider range.
- Sell GBP/JPY. Trend – MT is bear normal. Sell on a break below 151.50.
- Sell EUR/JPY. Trend – MT is bear normal. Continue to sell. There is lots of downside potential.
- Wait CAD/JPY. – MT is sideways normal. Wait for now.
- Wait CHF/JPY. – MT is sideways normal. Wait for now.
- Sell GBP/NZD. Trend – MT is bear normal. Sell for a move towards 1.94. Could be a good option if you want to short GBP.
- Sell EUR/NZD. Trend – MT is bear fast. Continue to sell.
- Sell AUD/NZD. Trend – MT is bear fast. Look to sell.
- Wait EUR/AUD. – MT is bear normal. Look to sell for a move towards 1.45. Could be a good option.
- Sell GBP/AUD. Trend – MT is bear normal. Look to sell.
- Wait AUD/CAD. – MT is sideways normal. Wait for now.
- Wait GBP/CAD. – MT is sideways volatile. Wait for now as near the bottom of the wider range.
- Wait EUR/CAD. – MT is sideways normal. Wait for now.
- Buy NZD/CAD. Trend – MT is bull normal. Continue to buy.
- Wait GBP/CHF. – MT is bear fast. Wait for now with SNB coming up.
- Wait CAD/CHF. – MT is sideways quiet. Wait for now.
- Wait NZD/CHF. – MT is sideways normal. Wait for now.
- Wait AUD/CHF. – MT is sideways quiet. 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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