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. The dollar finished the weak mixed against the major currencies. Sentiment remains focused on tax reform where President Trump has been making progress. On the flip side of the coin, Russian interference in the US Elections is back in the headline, and there is talk of Flynn flipping on Trump which could lead to an impeachment proceeding. If anything happened it would not be soon, but the news is negative for the dollar. This week, watch for Non-farm payrolls and for sentiment to possibly switch back to the impending rate hike in December and the outlook for rate hikes in 2018. Sell, but lower conviction.
- Buy GBP/USD. Trend – MT is bull normal. The GBP rose last week on Brexit talk progress as the UK raised the amount they would pay out for the severance settlement to an acceptable level. The main sticking point is now the Irish border which saw some of the positive sentiment reverse on Friday. The issue is that Ireland and the EU don’t want a hard border between Northern and Southern Ireland, but a Brexit requires a hard border. There are ways to resolve this though such as a model like Hong Kong and China. There is a key lunch on Monday between May and Junker where this will be discussed so watch out for news on this. Continue to buy.
- Wait USD/JPY. – MT is bear volatile. There was a great deal of volatility on JPY on Friday on the back of some risk-off concern in stocks surrounding Flynn’s implications of President Trumps involvement with the Russians. Otherwise the yen performed poorly last week on the back of rising stock markets and rising U.S. Bond yields.
- Wait AUD/USD. – MT is sideways normal. The pair rebounded strongly on Friday after falling each day last week. Data has been mixed out of Australia and China, not providing any great direction. This week we have the RBA who will likely maintain their neutral stance. Wait for now.
- Buy EUR/USD. Trend – MT is bull normal. The EUR is maintaining the bull MT on the back of strong economic data. There is still no coalition in Germany with the parties still in talks. The pair still looks good for a move towards 1.21 though there is a real risk of a fundamental catalyst reversing this trend, be it NPF and rate hike optimism or tax reform.
- Wait NZD/USD. – MT is sideways normal. The kiwi continues to bounce around of the key 0.68 level. Data is poor, with business confidence reaching the lowest levels since 2009. But with the pair oversold, watch for a break above 0.70 if we get negative USD sentiment.
- Sell USD/CHF. Trend – MT is bear normal. Risk aversion and USD weakness continue to drive the pair lower. Continue to sell.
- Wait USD/CAD. – MT is sideways quiet. The pair briefly broke out into a bull MT during the week before reversing strongly on Friday, in the largest one day move in some time. Canadian employment and GDP numbers were stellar and this, combined with USD weakness, drove the pair rapidly lower. The rising Oil price can’t have hurt matters too. We are back within the range but look for a break below 1.26 on continued USD weakness.
- Wait EUR/GBP. – MT is sideways normal. Despite positive Brexit sentiment, the pair remains range bound. Wait for now.
- Wait EUR/CHF. – MT is sideways normal. Wait, or contrarian sell.
- Sell AUD/JPY. Trend – MT is bear normal. Continue to sell.
- Sell NZD/JPY. Trend – MT is bear normal. Continue to sell.
- Buy GBP/JPY. Trend – MT is bull normal. Look to buy.
- Wait EUR/JPY. – MT is sideways normal. Wait.
- Wait CAD/JPY. – MT is bull volatile. Wait.
- 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, but careful of topping action.
- Wait AUD/NZD. – MT is sideways quiet. Wait.
- Buy EUR/AUD. Trend – MT is bull normal. Continue to buy, but careful of topping action.
- Buy GBP/AUD. Trend – MT is bull normal. Continue to buy.
- Wait AUD/CAD. – MT is sideways normal. Wait.
- Wait GBP/CAD. – MT is bull volatile. Wait.
- Wait EUR/CAD. – MT is bull volatile. Wait.
- Wait NZD/CAD. – MT is sideways normal. Wait.
- Wait GBP/CHF. – MT is sideways normal. Wait.
- Wait CAD/CHF. – MT is bear volatile. Wait.
- Sell NZD/CHF. Trend – MT is bear normal. Continue to sell.
- Sell AUD/CHF. Trend – MT is bear normal. Continue to sell.
- USDSGD Trend – MT is bear normal. Continue to sell.
- USDCNY Trend – MT is bear normal. Continue to sell.
- Wait Gold. – MT is sideways normal. Wait.
- Wait Copper. – MT is sideways normal. Wait.
- Buy Oil. Trend – MT is bull normal. Continue to buy.
- Buy S&P 500. Trend – MT is bull normal. Continue to buy.
- Wait DAX. – MT is sideways volatile. Wait.
- Wait Nikkei. – MT is sideways normal. Wait.
- Wait T-Notes. – MT is sideways normal. Wait.
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Economic calendar for the week ahead:
(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.