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. These are 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 normal. Powell’s testimony left no doubt about a July rate cut likely followed by a second one by the end of the year. As a result, the recent bullish momentum on the Dollar Index was reversed and continued down into the end of the week. Yet the latest data out of the US has not been too disappointing, it could be an indication that the softness in the US economy might be only a temporary phenomenon.
- Sell GBP/USD. – MT is bear normal. The break below 1.2500 did not have a follow through and the Pound has bounced off it. We see this as an opportunity to continue selling from more attractive levels as the outlook for the Pound remains skewed to the downside due to Brexit risks and uncertainty around who will be the next Prime Minister.
- Wait USD/JPY. – MT is sideways normal. After finding support at 107.00 the pair has now encountered resistance at 109.00. Stocks keep marching into new highs and we would expect this to support the pair higher. We need indeed to wait and see what develops with US Retail Sales data and Q2 earnings season starting next week with focus on financial stocks.
- Wait AUD/USD. – MT is sideways normal. Key resistance at the 0.70 level is being tested again in AUDUSD, however, we now have a potential inverse head and shoulder pattern forming which if triggered could lead to a higher Aussie in the weeks ahead. Employment figures and minutes to the RBA meeting due out this coming week might give us some more clues.
- Wait EUR/USD. – MT is sideways normal. After failing to break through 1.1400 the EUR found support at 1.1200 and continues to remain range bound reflecting the current uncertainties about the economic outlook in both the Eurozone and the US.
- Wait NZD/USD.– MT is sideways normal. Similar to the Aussie, the Kiwi is retesting resistance at 0.67. The RBNZ is in an easing cycle and a further rate cut is widely expected in August. In the coming week inflation data for the June quarter might give an indication whether the current strength can help the Kiwi fly a bit higher.
- Wait USD/CHF. – MT is sideways normal. Volatility has increased in the past 3 weeks and the pair had a decent bounce off support at 0.97 finding resistance again at 0.995 in line with the downtrend which started in May. However, US stocks are now making new all-time highs and we wouldn’t be surprised to see some consolidation before the pair decides whether to retest support or reverse course.
- Sell USD/CAD. – MT is bear normal. The surprisingly strong inflation report for May released last month sent the pair sharply lower from 1.3400 and the CAD is now trading below 1.3100 with the next support area at 1.2900-1.2800. Inflation data for June is due out this week.
- Wait EUR/GBP. – MT is bull quiet. Volatility has been falling since the big surge in May and while there are no clear signs of a reversal the pair seems to be struggling at the 0.900 level.
Crosses
- Wait EUR/CHF. – MT is sideways normal.
- Wait AUD/JPY. – MT is sideways normal.
- Buy NZD/JPY. – MT is bull normal.
- Wait GBP/JPY. – MT is bear quiet.
- Wait EUR/JPY. – MT is sideways quiet.
- Buy CAD/JPY. – MT is bull normal.
- Wait CHF/JPY. – MT is sideways normal.
- Sell GBP/NZD. – MT is bear normal.
- Sell EUR/NZD. – MT is bear normal.
- Wait AUD/NZD. – MT is sideways normal.
- Sell EUR/AUD. – MT is bear normal.
- Sell GBP/AUD. – MT is bear normal.
- Wait AUD/CAD. – MT is bear quiet.
- Sell GBP/CAD. – MT is bear normal.
- Sell EUR/CAD. – MT is bear normal.
- Wait NZD/CAD. – MT is bear normal.
- Wait GBP/CHF. – MT is bear quiet.
- Buy CAD/CHF. – MT is bear normal.
- Wait NZD/CHF. – MT is sideways normal.
- Wait AUD/CHF. – MT is sideways normal.
Other Markets
- Buy Gold. – MT is bull normal.
- Buy Oil. – MT is bull normal.
- Buy S&P 500. – MT is bull normal.
- Wait DAX. – MT is sideways normal.
- Buy Nikkei. – MT is bull normal.
- Sell T-Notes. – MT is bear normal.
(MT = Market Type: Click for more information on market types.)
About the Author
Massimiliano Andrighetto is a currency trader and member of the team at FxRenew. If you like his writing you can follow it here. You can also get Free access to the Advanced Forex Course for Smart Traders.