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 has recaptured the key 100 level and formed a weekly bullish engulfing candle. This is suggestive of further upside. Sentiment remains fixated on Trump with his talk of tax reform exciting bulls, while his complaints that the USD is too strong against Japan, China and Germany provide hope to bears. It’s also important to note that US bonds put in a good showing last week which is bullish USD. Expect Yellen to be hawkish in her tone in her testimonial to congress this coming Tuesday and Wednesday. Otherwise watch out for inflation and retail sales data this week. The main driver should be tax reform talk (if we get it).
- Buy GBP/USD. Trend – MT is bull normal. The bottoming action in the pound continues to play out with the currency being brought on good data. There will likely be no new Brexit news this week with parliament in recess. Watch for inflation data on Tuesday.
- Wait USD/JPY. – MT is bear normal. The yen continues to struggle with Presidents Trumps weak dollar talk. This is in-spite of rising US bond yields and risk-on in stocks. Hence I hesitate to sell this daily bear MT.
- Buy AUD/USD. Trend – MT is bull normal. The bull market in metals (Gold, Iron Ore, Copper) continues, which along with a cautiously optimistic RBA and a risk-on environment is supporting the currency. Next targets remains .7775 , but caution required if the market latches onto the US Tax Reform theme.
- Wait EUR/USD. – MT is sideways normal. We have a weekly bearish engulfing pattern, but I would look for a break of 1.06 which would shift us into a daily bear MT. Euro sentiment is starting to shift back to concerns about politics and Greece is back in the limelight as they require more money with bonds coming due, but the IMF is suggesting that they not doing enough… a very messy situation that could spiral out of control, in particular if it is combined with new governments in France and/or Germany later this year (We should expect changes here, given the Trump and Brexit experiences).
- Wait NZD/USD. – MT is bull volatile. The RBNZ’s stance is that the NZD is too high at current levels and have been talking the currency down. This, combined with poor data have seen the recent bull MT come to an end and we have a bearish engulfing week in play. This is suggestive of more downside to come.
- Wait USD/CHF. – MT is sideways normal. The CHF will be a beneficiary of concerns around Eurozone politics, in particular if we switch to a risk-off environment. For now, note the weekly bearish engulfing pattern which should lead to some upside, though I would like the pair to hold above the key 100 level here before getting to excited.
- Wait USD/CAD. – MT is sideways volatile. The CAD ended the week strongly on the back of a sharply rising oil price and good jobs data. Wait for now.
- Wait EUR/GBP. – MT is sideways normal. We have choppy mid range price action. Wait for now.
- Wait EUR/CHF. – MT is bear normal. But we have a minor double bottom in place so wait.
- Wait AUD/JPY. – MT is sideways normal. Wait.
- Wait NZD/JPY. – MT is sideways normal. Wait.
- Wait GBP/JPY. – MT is bear volatile. Buy above 1.46.
- Sell EUR/JPY. Trend – MT is bear normal. Note the bearish hammer on Friday confirming the bear MT.
- Wait CAD/JPY. – MT is sideways normal. Wait.
- Wait CHF/JPY. – MT is sideways normal. Wait. Possible buying opportunity off bottom of the range, but signals are mixed.
- Wait GBP/NZD. – MT is sideways normal. Wait.
- Wait EUR/NZD. – MT is sideways normal. Wait.
- Buy AUD/NZD. – MT is bull fast. Look to buy with next target as 1.0750.
- Sell EUR/AUD. Trend – MT is bear normal. Look for a move to 1.37
- Wait GBP/AUD. – MT is bear volatile. Wait.
- Buy AUD/CAD. Trend – MT is bull normal. Continue to buy.
- Wait GBP/CAD. – MT is sideways normal. Wait.
- Wait EUR/CAD. – MT is sideways normal. Wait.
- Wait NZD/CAD. Trend – MT is bull volatile. Wait.
- Wait GBP/CHF. – MT is sideways normal. Wait.
- Wait CAD/CHF. – MT is sideways normal. Wait.
- Wait NZD/CHF. – MT is sideways normal. Bearish engulfing week suggestive of some downside.
- Buy AUD/CHF. Trend – MT is bull normal. Look to buy. Break of major resistance done.
- Wait Gold. – MT is bull normal. Look to buy.
- Wait Oil. – MT is sideways normal. Wait.
- Buy S&P500. Trend – MT is bull normal. Continue to buy.
- Sell T-Notes Reversal– MT is sideways normal. bearish engulfing off top of the range suggests more downside to come.
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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.