Forex Trading Opportunities for the Week Ahead 18 April 2016

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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. 

  • Wait GBP/USD.  – MT is sideways normal. Nothing really new to report on the pound. Economic reports continue to be weak and Brexit concerns have not gone away. We remain range bound vs. the US, so in the absence of any strong signals, it’s best to wait.
  • Sell USD/JPY.  Trend  MT is bear normal. Japan was sadly been experiencing the worst earthquakes since 2011. This is putting pressure on JPY.  Additionally last weeks slowing of downside momentum in the pair reduces the chance of any BOJ intervention, as the BOJ cares not only about the price but the speed of the Yen’s movements. In this MT and with a bearish engulfing day on Friday, continue to sell.
  • Wait AUD/USD. –  MT is sideways normal. AUD is pushing the upper bounds of the sideways MT and stocks continue to trade higher. China data came in at expectations which was also supportive of AUD. Wait for now but I think a short-term opportunity to the upside on a break of the high, unless we see a sudden sell off in equity markets (which I am increasingly wary of based on market type theory).
  • Sell EUR/USD.  Trend – MT is sideways normal. The EUR broke out to the downside of the sideways quiet MT that had been forming on the 4 hour charts. This occurred after a clear rejection of the topside. Technically we also see the formation of a evening star pattern on the weekly charts. Fundamentally, there is a lack of clarity from both the Fed and ECB, and we will need to look to this weeks ECB meeting for clues. From a macro (rather than monetary policy) point of view the Euro region faces major issues, more so than the US.
  • Buy NZD/USD. Trend– MT is bull normal. The grinding uptrend continues despite weakness on the AUDNZD cross. Continue to buy, but maintain a healthy dose of caution in this MT.
  • Wait USD/CHF. – MT is bear volatile. We have entered a bear volatile phase, which is the precursor to a sideways MT. Wait for now.
  • Wait EUR/CHF. – MT is sideways quiet. Stalk a breakout into a bull market. But a fair degree of caution should be maintained as Swiss economic performance has been surprisingly strong, while EUR is not looking great technically.
  • Sell USD/CAD. Trend – MT is bear normal. The bear normal market type continues. This weekend we have the Doha meeting, where Saudi Arabia and Russia may decide on a freeze in oil production. The problem is that even if we do get a freeze, it does not solve the oversupply problem. Only a major cut in production would do that, which is not on the cards. This aside, the run up in oil, which is on the back of speculation rather than fundamentals, may continue if the news is perceived to be positive. Negative news could cause a sell-off in risk assets. I have upped my caution levels on CAD now we have hit 1.2800 and if Oil sells off after the weekend, we could easily see the market type turn sideways.
  • Buy EUR/GBP. Trend – MT is bull normal. While we remain in a bull normal MT, price action is giving hints that we may turn sideways. Continue to buy but with lower conviction.
  • Wait AUD/JPY.  – MT is sideways volatile. The pair recovered strongly last week and with stocks up and mixed price action it’s best to wait.
  • Wait  NZD/JPY. – MT is sideways volatile. The key level discussed last week held and the price has reverted to a sideways MT.
  • Sell GBP/JPY. Trend– MT is bear normal. Continue to sell.
  • Sell EUR/JPY.  Trend MT is bear normal. Continue to sell on a break of 122.50, decent breakout set-up here with a sideways quiet on the 4 hour charts.
  • Wait CAD/JPY. – MT is sideways normal. We have reverted back into a sideways MT. This could be one to watch depending the outcome of Doha.
  • Sell CHF/JPY. Trend– MT is bear normal. Continue short, but possibly best to wait for a break of the key level at 111.80.
  • Sell GBP/NZD. Trend– MT is bear normal. Continue to sell with no real support through to 1.93.
  • Sell EUR/NZD.  Breakout– MT is bear normal. We are breaking out into a bear normal. Correct approach will be a stop sell at 1.6225, after near term support has been breached.
  • Wait  AUD/NZD. – MT is sideways normal. Wait for now.
  • Wait EUR/AUD.  – MT is sideways normal. Breakout has failed and we are now pushing the opposite side of the range. Wait.
  • Sell GBP/AUD. – MT is bear normal. Continue to sell.
  • Wait  AUD/CAD. –  MT is sideways normal. Wait
  • Sell GBP/CAD.  Trend –  MT is bear normal. Continue to sell.
  • Sell EUR/CAD.  Breakout–  MT is bear normal. Look to sell
  • Wait NZD/CAD. – MT is sideways  normal. Wait.
  • Sell GBP/CHF. Trend – MT is bear normal. Continue to sell, but careful as we could be turning sideways.
  • Wait CAD/CHF.  – MT is sideways normal. Almost a bull normal but technically looks over extended and trading near the top the range.
  • Wait NZD/CHF. – MT is sideways normal. Wait.
  • Wait AUD/CHF. – MT is sideways volatile. Wait.

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Economic calendar for the week ahead:

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(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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