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. While we remain within the weekly sideways quiet MT, the DXY is pressing towards the top of the range. Divergence remains between the monetary policy and economic performance of the US and it’s main counterparts. This is despite the recent dovish shift by the Federal Reserve. NFP numbers came in decent on Friday with a headline number beat. On the downside, wage growth was below expectations. There is talk that a trade deal between the US and China is near to completion, but no date has been set for the two leaders to meet as yet. US bond yields have recovered somewhat in the past week, but the downtrend is still intact.
- Wait GBP/USD. – MT is sideways normal. GBP continues to hover around support at 1.30. A bill has passed making it a legal obligation to avoid a hard Brexit. Of course this only applies to the Brits and not the Europeans whom could still force the exit. But the consensus is that the EU will allow a longer extension to give the UK time to sort things out. There is still an outlier risk that a hard Brexit does occur on 14th of April so it’s safest to wait for now.
- Wait USD/JPY. – MT is sideways normal. Positive risk appetite, improving bond yields and weak Japanese data have seen the pair float higher. There is resistance at 112.00 so until that is cleared, it is best to wait.
- Wait AUD/USD. – MT is sideways quiet. The Aussie has been stuck in a tight 100 pip range for the last three weeks. A break-out of this range will lead to some opportunities either way. A break through .70 opens the door for a move towards 0.6750. On the other hand a break above 0.71750 could lead to some temporary upside toward 0.73-74. The challenge for the Aussie is the Central bank may well cut rates later in the year. Good China data and rising Iron-ore prices could drive the pair higher in the near-term.
- Wait EUR/USD. – MT is sideways normal. EURUSD again tested the key 1.12 level in the past week but failed to break though. Just as importantly there was no strong bounce either. Data remains tepid in the region with manufacturing particularly weak. I like to be selling the pair below 1.12.
- Sell NZD/USD. – MT is bear normal. The RBNZ is playing catch up with other central banks and a rate cut is now on the cards possibly as early as May. The economy continues to tick along ok, so the dovishness seems a response to the global situation. The RBNZ would prefer the exchange rate to stay weak and with interest rates sliding globally, it does not want to be the exception. Note that there is a fair bit of support so watch for a bounce from 0.67.
- Wait USD/CHF. – MT sideways normal. The recovery in stocks and USD strength has seen the pair recapture the key 1.0 level. Importantly, EURCHF has found support. Wait for now.
- Wait USD/CAD. – MT is sideways quiet. The rising oil price is supporting the Canadian dollar. Canadian employment slowed on Friday. We are stuck mid-range and direction is not clear. Wait for now.
- Wait EUR/GBP. – MT is bear normal. There is a lot of volatility in the pair between 0.87 and 0.85. While long-term I do think the pair is a short, the risk is high at the moment so best to stay away.
- Wait EUR/CHF. – MT is bear normal. Reversing off key support.
- Wait AUD/JPY. – MT is sideways quiet.
- Sell NZD/JPY. – MT is bear normal.
- Wait GBP/JPY. – MT is sideways normal.
- Wait EUR/JPY. – MT is sideways normal.
- Wait CAD/JPY. – MT is sideways normal.
- Wait CHF/JPY. – MT is sideways normal.
- Wait GBP/NZD. – MT is sideways normal.
- Wait EUR/NZD. – MT is sideways normal.
- Buy AUD/NZD. – MT is bull normal.
- Sell EUR/AUD. – MT is bear normal.
- Sell GBP/AUD. – MT is bear normal.
- Wait AUD/CAD. – MT is sideways normal.
- Sell GBP/CAD. – MT is bear normal.
- Sell EUR/CAD. – MT is bear normal.
- Sell NZD/CAD. – MT is bear normal.
- Sell GBP/CHF. – MT is bear normal.
- Wait CAD/CHF. – MT is bear volatile.
- Sell NZD/CHF. – MT is bear normal.
- Wait AUD/CHF. – MT is sideways normal.
- Wait Gold. – MT is sideways normal.
- Buy Oil. – MT is bull normal.
- Buy S&P 500. – MT is bull normal.
- Buy DAX. – MT is bull normal.
- Buy Nikkei. – MT is bull normal.
- Wait T-Notes. – MT is bull volatile.
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(MT = Market Type: Click for more information on market types.)
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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