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Weekly Game Plan 27 Aug 18

It should be a quiet start to the week, with hardly any news issued over the weekend and a bank holiday in the UK on Monday. Going into the week, remember that month-end flows will impact the markets. With Nasdaq +3.5% on the month, Russel 2000 +3.23%, Dow +1.6% vs. Nikkei flat, FTSE down 1% and Eurostoxx – 2.7%, we can realistically expect some broad USD selling vs. buying of EUR & GBP between Thursday and Friday.

Themes for the Week:

  • Decision time for USD: dovish commentary from key FED speakers at Jackson hole put another dent into the USD rally. On top of this, there is the ongoing drama in Washington with the Mueller investigation throwing more dirt on Trump. So keep your wits about you. In the short-term, we might be in for further losses if 95.00 breaks.  DXY Chart  
  • Cad might benefit from apparent NAFTA progress. Once the issues with Mexico are out of the way, Canada can sit down at the table and negotiate.
  • Lack of progress in US/China talks shouldn’t upset markets – but keep an eye on China data this week.
  • Australian politics might generate some more volatility in AUD this week, as politics usually does with frequent flip-flops. But USD and China will probably have more influence over the AUD then their internal political scene.

Data in the week ahead:

  • US GDP (Revision)
  • Core PCE
  • Cad GDP
  • China PMI

On the Radar:

Going into the week I have a long stance on US equities, a bullish stance on the Eur (Vs. GBP and USD), potentially bearish stance on USDCAD. This is the last week of August and markets are still not back in full swing, so factor this into your risk appetite and be selective.

About the Author

Justin is a Forex trader and Coach. He is co-owner of www.fxrenew.com, a provider of Forex signals from ex-bank and hedge fund traders (get a free trial), or get FREE access to the Advanced Forex Course for Smart Traders. If you like his writing you can subscribe to the newsletter for free.

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