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.
- Buy DXY Trend – MT is sideways normal. The DXY is holding above the key 100 level. This coming week we can expect the Federal Reserve to hike rates. We can expect one to two more hikes later in the year. Market participants will watch closely Janet Yellen’s comments on Wednesday to determine the pace of the hikes. Note that bonds have broken down out of the recent range which is USD supportive. Technically, the DXY is just holding onto the bull MT. Look to buy on a dip only.
- Sell GBP/USD. Trend – MT is bear normal. The pound continues to sell of last week on the back of USD strength and lingering Brexit concerns. Given the two doji formed at the end of the week, caution is required. sell a rally only. Watch for BOE on Thursday.
- Wait USD/JPY. – MT is sideways normal. After initially breaking out of the recent range on Friday, a bearish hammer has formed indicating a shift back into a sideways MT. Given the upcoming news this week it’s hard to get too excited about shorting the pair here, but we do want to be careful of establishing longs until we clear 115.50 again.
- Sell AUD/USD. Trend – MT is bear normal. The pair continues to sell off despite a hawkish tone from RBA Governor Lowe. Iron Ore and copper continue to slide which is also pressuring the pair, along with a series of bearish China reports last week. Continue to sell.
- Wait EUR/USD. – MT is sideways normal. The euro rose last week on the back of less dovish comments by the ECB and then closed near the top of the recent range after NFP. Perhaps this is because the report was not quite strong enough for traders (though it should be strong enough for a rate hike). It may also have to do with intervention by the SNB with a large rise in EURCHF as well as sharp gains in Bund yields. Look to trade a break into a bull MT. Buy above 1.0720.
- Sell NZD/USD. Trend – MT is bear normal. The Kiwi is coming under a fair bit of pressure. This was not helped by a 6.3% fall in the dairy trade auction. Continue to sell, but with caution as we are shifting from a fast to a normal MT so we may see a bounce here.
- Buy USD/CHF. – MT is bull normal. The bull normal MT continues, perhaps supported by intervention in the EURCHF by the SNB. Continue to buy but with caution at these levels.
- Buy USD/CAD. Trend – MT is bull normal. Oil sold off dramatically last week after breaking the sideways quiet MT. This keeps the CAD under pressure despite a good Canadian employment report. Continue to buy.
- Buy EUR/GBP. Trend – MT is bull fast The large divergence in Bund and Gilt performance continues to favor the EUR. Continue to buy.
- Buy EUR/CHF. Trend – MT is bull fast. Continue to buy.
- Wait AUD/JPY. – MT is sideways normal. Wait.
- Sell NZD/JPY. Trend – MT is bear normal. Continue to sell.
- Wait GBP/JPY. – MT is sideways quiet. Look for a break of 138.00 to sell the pair.
- Buy EUR/JPY. Trend – MT is bull normal. Look to buy and note the prior weeks bullish engulfing candle.
- Wait CAD/JPY. – MT is sideways normal. Wait.
- Sell CHF/JPY. Reversal – MT is sideways normal. Doji off the top of the range presents selling opportunity.
- Buy GBP/NZD. Trend – MT is bull normal. Continue to buy.
- Buy EUR/NZD. Trend – MT is bull fast. Look to buy, but keep stops tight in this MT.
- Buy AUD/NZD. – MT is bull normal. Continue to buy.
- Buy EUR/AUD. Trend – MT is bull normal. Look to buy.
- Wait GBP/AUD. – MT is sideways normal. Wait.
- Buy AUD/CAD. Trend – MT is bull normal. Continue to buy.
- Wait GBP/CAD. – MT is sideways quiet. Wait.
- Buy EUR/CAD. Trend – MT is bull normal. Continue to buy.
- Wait NZD/CAD. – MT is sideways normal. Wait.
- Sell GBP/CHF. – MT is bear normal. Look to sell.
- Sell CAD/CHF. Trend – MT is bear normal. Look to sell.
- Sell NZD/CHF. Trend – MT is bear normal. Look to sell.
- Sell AUD/CHF. – MT is bear normal. Look to sell.
- Sell Gold. Trend – MT is bear normal. Look to sell but caution required with the formation of a bullish hammer.
- Sell Oil. Trend – MT is bear fast. Look to sell.
- Buy S&P 500. Trend – MT is bull normal. Continue to buy.
- Wait T-Notes – MT is bear normal. But we are at support so caution required.
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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.