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 DXY. – MT is sideways normal. The USD failed to breakout to a new high last week and we have a busted breakout pattern off key support which is typically a strong reversal signal. A weekly bearish hammer has formed. The fundamental catalyst for this sell-off was president Trump commenting that he is not happy with the trajectory of Fed rate hikes (though he did say he will not interfere). He has been tweeting that the dollar is too strong and that China and Europe manipulate there currency. This is not likely to impact the Fed who are set on continuing to hike. Bigger picture, the number of hikes it not really priced in so the dollar could end up much higher. But for now, technicals and sentiment suggest that selling is the correct approach.
- Buy GBP/USD. Reversal – MT is sideways normal. The GBP has formed a key reversal day off major support after failing to breakout through the 1.30 level. This is suggestive of a move back to 1.34. The fundamental picture is not great with Brexit news in the headlines. Prime Minister May is said just to have survived a potential no confidence vote, and there is still political risk here. Data was not great in the last week and it looks like next months rate hike will be one and done.
- Buy USD/JPY. Trend – MT is bull normal. After taking out 113, the pair has sold off back to resistance turned support at 111.40. Any further slide shifts us out of the bear MT. With strong US stocks and rising US bond yields I still like the pair for a move back towards 115. But the technical reversal pattern on the USD is strong so we may see some more downside here.
- Wait AUD/USD. – MT is sideways quiet. We continue to consolidate around the key 0.7350 level. There is a weekly bullish hammer is in play which is often indicative of a bullish reversal. Base metal prices are struggling. Of note is the recent large fall in the price of copper, which provides a cautious outlook for the AUD. At the moment the Aussie looks somewhat caught between the diverging factors of risk on/ positive data and USD strength/trade war/ China concerns/ falling CNY. With the USD failing at the moment we could see some upside for the pair. Look for a break out above 0.75 or below 0.73 for a resumption of the downtrend.
- Wait EUR/USD. – MT is sideways normal. The basing pattern continues to play out and we can look for a move back towards 1.19. We need to watch this coming weeks ECB meeting for any hawkish speak. But the market has low expectations for the meeting so it may be a non-event.
- Wait NZD/USD. – MT is sideways normal. A strong reversal pattern has formed on weekly charts off the key 0.67 level and we continue to form a base. Fundamentally, we have falling dairy prices (somewhat off-set by the rising USD) and trade war concerns which have weighed on the pair. GDP growth is below trend but fiscal stimulus from the NZ government may provide support going forward. Inflation may also be firming which will keep the RBNZ from any further cuts. I think there is an opportunity to trade a break either way here depending on USD sentiment. Look for a move above 0.6850 to get long or below 0.67 for a resumption of the downtrend.
- Wait USD/CHF. – MT sideways normal. Despite rising stocks and relatively positive risk sentiment USDCHF failed to hold the break above the key 1.00 level. EURCHF has also been holding steady. Wait for now.
- Wait USD/CAD. – MT is sideways normal. We remain within the sideways MT. USDCAD sold off on Friday on the back of USD weakness and strong retail sales and inflation data.
- Buy EUR/GBP. Trend – MT is bull normal. We have broken out into a bull MT and it should not be a surprise if the key .8970 level is taken out next. If we do take it out, watch for a strong reversal pattern as a shorting opportunity.
- Buy EUR/CHF. Trend – MT is bull normal. Continue to buy.
- Buy AUD/JPY. Trend – MT is bull normal. Continue to buy.
- Buy NZD/JPY. Contrarian – MT is bear normal. Double bottom in place. Contrarian buy.
- Wait GBP/JPY. – MT is sideways normal. Wait.
- Buy EUR/JPY. Trend – MT is bull normal. Continue to buy.
- Buy CAD/JPY. Trend – MT is bull normal. Continue to buy.
- Buy CHF/JPY. Trend – MT is bull normal. Continue to buy.
- Wait GBP/NZD. – MT is sideways normal. Wait.
- Wait EUR/NZD. – MT is sideways normal. Wait.
- Wait AUD/NZD. – MT is sideways normal. Wait.
- Wait EUR/AUD. – MT is sideways quiet. Wait.
- Sell GBP/AUD. Trend – MT is bear normal. Look to sell.
- Wait AUD/CAD. – MT is sideways normal. Wait.
- Wait GBP/CAD. – MT is sideways normal. Wait.
- Wait EUR/CAD. – MT is sideways quiet. Wait.
- Wait NZD/CAD. – MT is sideways normal. Wait.
- Wait GBP/CHF. – MT is sideways normal. Wait.
- Wait CAD/CHF. – MT is sideways normal. Wait.
- Wait NZD/CHF. – MT is sideways normal. Look to buy above 0.68
- Wait AUD/CHF. – MT is sideways normal. Wait.
- Sell USDSGD. Contrarian – MT is sideways normal. Double top off resistance. Look to sell.
- Buy USDCNH. Trend – MT is bull normal. Continue to buy, some profit taking appropriate here.
- Wait Gold. – MT is bear normal. Reversal pattern in place. Wait or brave contrarian buy.
- Wait Oil. – MT is sideways volatile. Wait.
- Buy S&P 500. Trend – MT is bull normal. Continue to buy.
- Wait DAX. – MT is sideways normal. Wait.
- Wait Nikkei. – MT is sideways normal. Wait
- Wait T-Notes. – MT is sideways quiet. 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.
The post Forex Trading Opportunities for the Week Ahead 23 July 18 appeared first on FX Renew.