Forex Trading Opportunities for the Week Ahead 19 December 2016

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. 

  • Buy DXY  Trend – MT is bull normal. The dollar strengthened this week on the back of the Federal Reserves rate hike and accompanying dot plot and statement. US Bond yields are up and the stock market is staying bid on the back of the trump reflation trade and decent data. I expect the dollar bull trend to continue.
  • Wait GBP/USD. – MT is sideways normal. The BOE was slightly more dovish than expected on Thursday. UK data has been OK, which I think is supportive of the currency. I continue to believe that Brexit concerns are overdone and the there are good opportunities to buy the GBP on the crosses.
  • Buy USD/JPY. Trend – MT is bull normal. The yen continues to march higher. We have BOJ this week and they should be happy with the recent weakness in the yen. No real signs of topping yet.
  • Sell AUD/USD. Trend –  MT is bear normal. We are breaking into a bear normal MT on the back of USD strength. There was good Aussie employment numbers but this did little to arrest the downward momentum in the pair. Selling-off after good data is quite a bearish sign. Look to get short.
  • Sell EUR/USD.  Trend –  MT is bear normal. The Euro is of great interest at the moment. We broke the key 1.05 level at the 2015 low and are now at the lowest levels seen since 2003. Always watch for a reversal off these major levels, but I certainly prefer the short side. Greek issues are coming back on the horizon and political issues across the region are not abating. Look to sell.
  • Sell NZD/USD. Trend –  MT is bear normal. The Kiwi is selling off on the back of USD strength and we have flipped into a bear MT on both daily and weekly charts. No major news of data have driven the move. Global Dairy Trade auction this week, where the prices have been trending up. Look to sell.
  • Buy USD/CHF. Trend – MT is bull normal. The SNB meeting told us nothing new, but with EURCHF resuming its weekly downtrend and given the fact we are butting up against resistance, I favor other pairs.
  • Wait USD/CAD.  – MT is bear volatile. Oil sold off after breaking above the key $50 level and has formed a bearish reversal pattern. Canadian data has been weak. The weekly bull MT continues. I prefer to look for buying opportunities.
  • Wait EUR/GBP. – MT is sideways normal.  After taking out the .8330 key level we have now turned into a sideways MT. I still like to sell the pair which you could do on a break of .8280 or if you want to be aggressive you could sell here at market.

Crosses

  • Wait EUR/CHF.  – MT is sideways normal. Wait for now, though I prefer the downside.
  • Buy AUD/JPY. Trend – MT is bull normal. Continue to buy on a dip but watch for a sell off here with the formation of a weekly hammer.
  • Buy NZD/JPY. Trend – MT is bull normal. Continue to buy on a dip but watch for a sell off here with the formation of a weekly hammer.
  • Buy GBP/JPY.  Trend – MT is bull normal. Continue to buy but watch out for Thursdays hammer.
  • Wait EUR/JPY. MT is bull normal. But I think we may turn sideways here.
  • Buy CAD/JPY. Trend – MT is bull normal. Continue to buy but watch for a reversal off resistance.
  • Buy CHF/JPY.  Trend – MT is bull normal. Continue to buy.
  • Buy GBP/NZD. Trend – MT is sideways quiet. Breaking out of the sideways quiet MT. I think a good way to play NZD shorts. Note this is counter the long-term trend.
  • Wait EUR/NZD. Trend – MT is bear volatile. Wait.
  • Wait AUD/NZD. – MT is sideways normal. Wait.
  • Wait EUR/AUD. – MT is sideways normal. Wait.
  • Wait GBP/AUD. – MT is sideways quiet. Wait.
  • Sell AUD/CAD. Trend –  MT is bear normal. Continue to sell.
  • Wait GBP/CAD. –  MT is sideways normal. Wait.
  • Sell EUR/CAD. Trend –  MT is bear normal. Continue to sell.
  • Sell  NZD/CAD. Trend  – MT is bear normal. Look to sell.
  • Wait GBP/CHF. – MT is sideways normal. Wait.
  • Sell CAD/CHF. Reversal MT is bull normal. Brave contrarian sell off weekly resistance, very good risk/reward but low probability. Still looks interesting to me. Have a weekly hammer in play now too.
  • Wait NZD/CHF. – MT is sideways volatile. Wait.
  • Wait AUD/CHF.  – MT is sideways normal. Wait.

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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.