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 dollar index is pressing the top end of the sideways range and a re-test of the 95.50 level looks likely. There are two main themes driving the dollar at the moment (and they are nothing new). Firstly, data continues to support 2 further rate hikes in 2018. There is clear monetary policy divergence between the US and its counterparts and the trajectory of hikes has not been fully priced in. The second driver is the ongoing trade spat with China. We have seen more tit-for-tat tariffs proposed in the last week. But it’s unclear if this is dollar bullish or bearish at this point in time. I prefer to look for buying opportunities on the USD.
- Sell GBP/USD. Trend – MT is bear normal. The main event last week for GBP was Thursdays rate hike. Despite the hike GBP sold off. BOE was not as hawkish as expected siting Brexit concerns and noting that the next move in rates could be up or down. Additionally, Carney has said that the pace of hikes would be no more than one a year. To top it off data remains tepid. Watch for a break of the key 1.30 figure next week.
- Wait USD/JPY. – MT is sideways normal. We have moved into a sideways MT and direction is a little unclear from here. The BOJ met last week and made changes to their operations, in particular allowing for greater fluctuations in the BOJ bond yield. While this move could be seen as hawkish, the BOJ committed again to ultra-loose monetary policy for the foreseeable future. The changes are to minimize any negative side-effects so they can keep the easy conditions for longer. USDJPY sentiment has been held back though on trade war escalations. Stocks remain robust which is supportive of the bull case.
- Wait AUD/USD. – MT is sideways quiet. Better data out of Australia has been supporting the pair ahead of next weeks RBA meeting, despite concerns over the impact of the trade spat. I do prefer to look for selling opportunities down through 0.7350.
- Sell EUR/USD. Trend – MT is bear normal. The EUR has broken out into a bear MT. This is mostly on the back of US strength and the ongoing economic and monetary policy divergence of the U.S. and E.U. Note that some political risk is rearing it’s head with Italy’s proposed budget clashing with E.U. regulations. I like to sell the pair.
- Wait NZD/USD. – MT is sideways quiet. Kiwi data has been pretty woeful and we are sitting near support. The pair is vulnerable to the on-going trade spat and we can expect the RBNZ to confirm that rates are going to stay flat for a fair while in next weeks meeting. Look for selling opportunities below 0.67.
- Wait USD/CHF. – MT sideways quiet. USDCHF remains range bound for now. While I like to buy USDCHF, if we look at EURCHF it is indicative that the focus is perhaps better to be EURUSD instead. Wait for now.
- Sell USD/CAD. Trend – MT is bear normal. Data, monetary policy, the oil price and a potential resolution to NAFTA are all supportive of CAD I do prefer to buy it vs. the crosses though.
- Wait EUR/GBP. – MT is bull normal. We are just holding onto the bull MT but we are likely to turn sideways here. Not a lot of conviction for me either way right now in the pair. Wait.
- Sell EUR/CHF. Trend – MT is bear normal. Look to sell.
- Wait AUD/JPY. – MT is sideways normal. Wait.
- Sell NZD/JPY. Trend– MT is bear normal. Look to sell.
- Sell GBP/JPY. Trend – MT is bear normal. Look to sell.
- Sell EUR/JPY. Trend– MT is bear normal. Look to sell.
- Wait CAD/JPY. – MT is sideways quiet. Wait.
- Wait CHF/JPY. – MT is sideways quiet. Wait.
- Wait GBP/NZD. – MT is sideways normal. Wait.
- Wait EUR/NZD. – MT is sideways quiet. Wait.
- Buy AUD/NZD. Breakout – MT is bull normal. Look to buy.
- Sell EUR/AUD. Breakout– MT is bear normal. Look to sell.
- Sell GBP/AUD. Trend – MT is bear normal. Continue to sell.
- Sell AUD/CAD. Trend – MT is bear normal. Continue to sell.
- Sell GBP/CAD. Trend – MT is bear normal. Continue to sell.
- Sell EUR/CAD. Trend – MT is bear normal. Continue to sell.
- Sell NZD/CAD. Trend – MT is bear normal. Continue to sell.
- Sell GBP/CHF. Trend – MT is bear normal. Look to sell.
- Buy CAD/CHF. Trend – MT is bull normal. Look to buy.
- Sell NZD/CHF. Trend – MT is bear normal. Look to sell.
- Wait AUD/CHF. – MT is sideways normal. Wait.
- Wait USDSGD. – MT is sideways normal. Wait.
- Buy USDCNH. Trend – MT is bull normal. Continue to buy.
- Sell Gold. Trend – MT is bear normal. Look to sell.
- Wait Oil. – MT is sideways normal. 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
- Sell T-Notes. Trend – MT is bear normal. Continue to sell.
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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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