07

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. 

  • Waiting GBP/USD. – MT is sideways volatile. The sideways volatile MT persisted last week with a sharp move back towards the bottom of the range. We are now sitting at support and as data has not really been negative, there is a decent chance support will hold. One caveat is risk-off flows from an increasingly shaky stock market could drive the pair lower. Stalk a reversal candle to buy off these levels with small positions only.
  • Waiting USD/JPY.  MT is sideways normal. We have been in a sideways MT for four weeks now. Demand for dollars is conflicting with risk-off flows and a some better than expected inflation numbers out of Japan (though I am getting mixed information from analysts on this, never-the-less BOJ’s Koruda is talking up good numbers) . Other data is generally bearish JPY. We have a bearish candle stick pattern on the 4 hour chart off the top of the range, which combined with a negative finish to the week for the s&P500 suggests a small short could be appropriate from these levels.
  • Waiting AUD/USD. –  MT is sideways normal. Aussie sold off on worse than expected Chinese data and over the long-term I expect the pair to continue to take these hits. I also expect the pressure to be on the AUD from both risk-off flows and divergent monetary policy between the Fed and RBA. In the short-term, unless the equity market continues into the new week, it would not be surprising for the pair to remain range bound ahead of NFP.
  • Waiting EUR/USD.– MT is sideways normal. We remain firmly entrenched in a sideways MT, which would indicate the near-term risk is to the upside ahead of next weeks NFP (also if equities continue to sell off). Long-term still very bearish. Short-term cautious and waiting for a trend to establish itself.
  • Waiting NZD/USD. – MT is sideways quiet. MT is starting to shift toward quite. NZD is staging (a very small) recovery based on a rebound in dairy prices. The preferred strategy is to stalk a breakout below the daily Bollinger bands.
  • Waiting USD/CHF.– MT is sideways normal. The pair was brought up last week after the “busted breakout” but failed to close above the daily bollinger band keeping up entrenched in a sideways MT.
  • Waiting  EUR/CHF. – MT is sideways normal. We have transitioned into a sideways MT and daily candlesticks are indicative of indecision. Look to buy around 1.0850 where there has been talk of officials buying. Bullish hammer on weekly charts is also a good sign.
  • Waiting USD/CAD. – MT is sideways quiet. We had a failed attempt to breakout higher last week with the formation of a bearish hammer. There was no follow though and we look for a breakout above the Bollinger Bands to establish fresh long positions.
  • Waiting EUR/GBP.  – MT is sideways normal. The pair was brought heavily after a failed breakout lower. Now back near the top of the range we prefer to wait for signals to go short.
  • Waiting AUD/JPY. MT is sideways normal. A bullish hammer indicates downside momentum has slowed but being middle of the range prefer to wait.
  • Waiting NZD/JPY. – MT is sideways quiet. Stalk the breakout lower. Careful as we have some divergence between equity market performance and JPY (normally we would expect the pair to have sold off), indicating underlying demand.
  • Waiting GBP/JPY. – MT is sideways normal. Expect the pair to head lower until we get a bounce in GBPUSD but no low-risk entry at this point.
  • Waiting EUR/JPY. –  MT is sideways normal. Stuck in the middle of the range wait for now.
  • Short GBP/NZD. Breakout– MT is bear normal. We have had a close below the Bollinger Band indicating a shift in trend. We want to wait for confirmation before going short, but if GBPUSD breaks resistance we could be in for a medium-term move lower. A bearish engulfing week also supports this thesis. Note that fundamentals are not supportive of a long-term move, but short-term sentiment is so make sure you implement any trades with a short/ medium term objective.
  • Waiting EUR/NZD. – MT is sideways quiet. Wait for now.
  • Waiting AUD/NZD. – MT is sideways volatile. Our sideways volatile persisting nicely. Look for a buy near 1.0900.
  • Waiting EUR/AUD. – MT is sideways normal. Wait for now.
  • Waiting GBP/AUD. – MT is sideways normal. Wait for now.
  • Waiting AUD/CAD. –  MT is sideways volatile. Wait for now.
  • Waiting GBP/CAD.– MT is sideways normal. Moving to sideways quiet MT, wait for now. Still prefer this as a buy long-term but we need short-term sentiment to shift back in favor of GBP.
  • Waiting EUR/CAD.  – MT is sideways quiet. Wait for now. Prefer to stalk a long breakout.
  • Long NZD/CAD. Breakout – MT is bull normal. Breaking out now on daily charts and a bullish engulfing on weekly charts. It could well fail but if you want to go long NZD this could be the pair to do it against. Note you will earn carry.
  • Waiting CAD/JPY.  – MT is sideways quiet. Wait for now.
  • Waiting CHF/JPY. – MT is sideways normal. Wait for now
  • Waiting GBP/CHF.– MT is sideways normal. Wait for now.

Analysis to read:

Marc Chandler

Jim Langlands

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.