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 DXY is holding above the key 100 level. Of note, economic data was good out of the US. On top of that Yellen maintained her hawkish tone. We could have expected a better response to these dollar bullish fundamental from the dollar, but we finished the week relatively flat. This is suggestive that the market sentiment is focused on President Trump and his tax reform initiatives on the one hand and protectionism on the other rather than on monetary policy. Overall I remain cautiously bullish USD.
- Wait GBP/USD. Trend – MT is sideways normal. The GBP has been holding up well, despite unimpressive data. Perhaps this is a positive sign for the pair and the prices response to the news is certainly worth continuing to monitor. Expect the focus to be back on Brexit over the next few weeks. Currently it looks like Article 50 (to begin the process of exiting the EU) will be triggered end of march with not too many road blocks in the way.
- Wait USD/JPY. – MT is sideways normal. The Yen continues hold it’s ground in-spite of rising US bond yields and risk-on in stocks. There is some suggestion that this may be safe-haven flows, though I am not convinced. One to monitor until a clearer picture is available.
- 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 I prefer to buy on a dip only as sentiment looks to be turning and the pair is overbought at these levels. Recent AU data has been weak as well, which suggests a sell-off may be coming.
- Wait EUR/USD. – MT is sideways normal. After an initial break of the 1.06 level the currency reversed and we have shifted back into a sideways MT. I still prefer to look for shorts given my bullish dollar view, monetary policy divergence, concerns around European politics and the issues that are bubbling up again with Greek debt. If market sentiment starts to focus on Greece we should see the pair shoot lower. For now, look to sell again under 1.06 on a resumption of the daily bear MT.
- Wait NZD/USD. – MT is sideways normal. There continues to be poor data out of NZ. This along with the prior weeks bearish engulfing candle on the back of RBA talking down the Kiwi suggest that further downside is in-store for the pair. Look to sell below 0.7130 on a shift to a daily bear MT.
- 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. Note the SNB now holds over 63 billion in US equities. If these need to be sold and the funds repatriated then the SNB will have little chance of holding back any gains in the CHF (to say the least). Wait for now in this MT.
- Wait USD/CAD. – MT is sideways normal. The CAD is finding support above the key 1.30 level and the MT has flipped to sideways normal. The pair is trading on the back of mixed USD sentiment and Oil remains range bound. Wait for now.
- Wait EUR/GBP. – MT is sideways normal. We have choppy mid range price action. Wait for now.
- Sell EUR/CHF. – MT is bear normal. Look to sell below 1.0630.
- 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. Continue to sell.
- Wait CAD/JPY. – MT is sideways normal. Wait.
- Wait CHF/JPY. – MT is sideways normal. Wait.
- Wait GBP/NZD. – MT is sideways normal. Wait.
- Wait EUR/NZD. – MT is sideways quiet. Wait.
- Buy AUD/NZD. Trend – MT is bull normal. 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.
- Wait AUD/CAD. – MT is sideways normal. Wait.
- Wait GBP/CAD. – MT is sideways quiet. 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. Continue to buy, but with caution.
- Buy Gold. – MT is bull normal. Look to buy.
- Wait Oil. – MT is sideways quiet. Wait.
- Buy S&P500. Trend – MT is bull normal. Continue to buy.
- Wait T-Notes – MT is sideways normal. Wait for now.
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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.