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.
- Sell DXY Trend – MT is bear normal. We have moved through the 98.80 level discussed in last weeks report and can expect further downside. This is on the back of a decent NFP result that is supportive of a June rate hike by the Fed. The counter-intuitive response by the USD suggests sentiment is more focused on rising stock markets and the wind down of risk around the French election than monetary policy divergence. This may well change in coming weeks, but for now we can look to sell the buck.
- Buy GBP/USD. Trend – MT is bull normal. The bull market type continues with the next target around 1.34. The GBP is rising despite tough talk from EU officials on the costs of Brexit. Data has been decent. Continue to buy,
- Buy USD/JPY. Trend – MT is sideways normal. With a global risk-on environment and rising US yields, USDJPY is breaking out into bull MT and it can be expected to continue (of course, pending the French election result).
- Wait AUD/USD. – MT is bear normal. Despite the continued sell off in Iron Ore and gold, AUDUSD formed a bullish hammer on Friday after NFP. This suggests caution for bears. If the sell-off in metals renews this week, and if USD comes back into favor we can look to sell again.
- Buy EUR/USD. Trend – MT is bull normal. A break though the key 1.0950 level on the back of the expected Macron win in the French election is suggestive of further upside. Hot European stocks, rising Bund yields and an uptick in inflation are all supportive of the bullish picture. I worry that the rise is temporary considering the Monetary policy divergence between the currencies, but for now, we can buy. This is assuming Macron wins. If Len Pen wins all hell will break out for the EUR and we could easily see the EUR at parity, at which point all analysis in this report becomes invalid.
- Buy NZD/USD. Reversal – MT is sideways normal. We have a technical entry off major weekly support. Dairy Milk prices continue to rise, and data is decent out of the NZ. With the global risk-on and the technical picture we can expect some upside in the Kiwi.
- Sell USD/CHF. Trend – MT is bear normal. We can look to sell USDCHF in sympathy with the EUR.
- Buy USD/CAD. Trend – MT is bull normal. With the bounce in Oil and the sell-off in the USD on Friday, CAD formed both a daily bearish engulfing candle and a weekly doji. This is indicative that the bullish breakout may be failing. Buy on a dip only, or wait.
- Wait EUR/GBP. Trend– MT is sideways normal. We have flipped into a sideways MT and are sitting mid range, so wait for now.
- Wait EUR/CHF. – MT is sideways normal. Price action including the gap give me caution, so best to wait.
- Wait AUD/JPY. – MT is sideways normal. Look to buy a break of 84.70.
- Wait NZD/JPY. – MT is sideways normal. Look to buy a break of 78.20
- Buy GBP/JPY. Trend – MT is bull normal. Continue to buy.
- Buy EUR/JPY. Trend – MT is bull normal. Look to buy.
- Wait CAD/JPY. – MT is sideways normal. Look to buy a break of 83.20
- Buy CHF/JPY. Trend – MT is bull normal. Look to buy.
- Buy GBP/NZD. Trend – MT is bull normal. Continue to buy.
- Buy EUR/NZD. Trend – MT is bull normal. Continue to buy.
- Wait AUD/NZD. – MT is sideways normal. Wait.
- Buy EUR/AUD. Trend – MT is bull normal. But price action is indicative of a temporary reversal. Buy on a dip only.
- Buy GBP/AUD. Trend – MT is bull normal. Continue to buy.
- Wait AUD/CAD. – MT is sideways volatile. Wait for now.
- Buy GBP/CAD. Trend– MT is bull normal. Continue to buy.
- Buy EUR/CAD. – MT is bull normal. Look to buy.
- Wait NZD/CAD. – MT is sideways normal.Wait.
- Buy GBP/CHF. Trend – MT is bull normal. Continue to buy.
- Sell CAD/CHF. Trend – MT is bear normal. Look to sell but on a pull-back only.
- Sell NZD/CHF. Trend – MT is bear normal. Look to sell, but careful as we may turn sideways here.
- Sell AUD/CHF. Trend – MT is bear normal. Look to sell but on a pull-back only.
- Wait Gold. Trend – MT is bear normal. Look to sell.
- Wait Oil. – MT is bear volatile. Wait.
- Wait S&P 500. Trend – MT is bull normal. Look to buy.
- Buy DAX. Trend – MT is bull normal. Continue to buy.
- Wait T-Notes – MT is sideways normal.Wait.
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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.