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.
- Sell DXY. – MT is bear normal. Price action was muted on the Dollar Index in the past week, likely in anticipation of this weekends meeting between Trump and Xi. The outcome of the meeting is unpredictable. In the long run it seems difficult for the US and China to resolve their trade issues. But this may not stop the two leaders coming to some sort of temporary accord. Even if they do, it will be interesting to see how this impacts the USD. You may think it would be bullish USD, as it would weaken the case for rate cuts. We will see.
- Wait GBP/USD. – MT is sideways normal. Despite the weekly minor double bottom, the pair was unable to hold above resistance at 1.28. Instead a evening star candlestick pattern formed which is keeping the downtrend intact. Brexit risks and uncertainty around who will be the next Prime Minister and how this will impact things should continue to weigh on the pair.
- Sell USD/JPY. – MT is bear normal. The downtrend remains intact. Stocks are sitting near record highs which normally would help to drive the pair higher, but bond yields remain particularly weak. Continue to sell for a move toward 105.00.
- Wait AUD/USD. – MT is sideways normal. The recovery in AUDUSD has been strong with the pair continuing to grind higher and closing the week right on key resistance at the 0.70 level. There is a high chance of a rate cut next week, so perhaps this will gap gains, but in the short-term sentiment will be focused on the outcome of the Trump-Xi meeting.
- Buy EUR/USD. – MT is bull normal. Bigger picture the EUR remains range bound, but for now we are in a upward phase. The key figure for me is 1.15. This should act as a logical target. If reached I expect the range to be held and 1.15 may act as a key resistance level and provide a nice selling opportunity. While the Fed has become more dovish, the ECB has too (although they have less room to maneuver). Data is not great out of the Eurozone. Unless the data really does turn around or the Fed does aggressively cut rates, it should be hard for the pair to hold above 1.15-16 in coming months.
- Buy NZD/USD. – MT is bull normal. Like the Aussie, the Kiwi has continued to grind higher against the USD. The pair has now closed back above resistance at 0.67 which is a sign the uptrend may well continue. This is despite the fact the the RBNZ is in an easing cycle. If the pair does get back to 0.69-70 then it may well be a nice selling opportunity.
- Sell USD/CHF. – MT bear normal. While the pair remains in a bear MT, a weekly doji candlestick pattern has formed at resistance around 0.9750. This could be an early sign that the currency will bounce. If we do get a decent bounce it may well act as a nice selling opportunity, in particular if US stocks fail to break the key resistance level they are currently sitting at.
- Sell USD/CAD. – MT is bear normal. The fundamentals have been signaling a change in the longer-term trend and we may have seen that with the pair now trading below 1.32. Yields and data both favor CAD strength. This is perhaps the best option to play vs. US if you think that we will see a period of USD weakness.
- Wait EUR/GBP. – MT is bull normal. This is a minor double top forming in the currency pair, but the price action is not decisively bearish. This is indicative that we are going to have a period of consolidation in the price action.
- Sell EUR/CHF. – MT is bear normal.
- Wait AUD/JPY. – MT is sideways normal.
- Buy NZD/JPY. – MT is bull normal.
- Wait GBP/JPY. – MT is sideways normal.
- Wait EUR/JPY. – MT is sideways normal.
- Buy CAD/JPY. – MT is bull normal.
- Buy CHF/JPY. – MT is bull normal.
- Sell GBP/NZD. – MT is bear normal.
- Sell EUR/NZD. – MT is bear normal.
- Sell AUD/NZD. – MT is bear normal.
- Wait EUR/AUD. – MT is sideways normal.
- Sell GBP/AUD. – MT is bear normal.
- Wait AUD/CAD. – MT is bear normal.
- Sell GBP/CAD. – MT is bear normal.
- Wait EUR/CAD. – MT is sideways normal.
- Wait NZD/CAD. – MT is sideways normal.
- Sell GBP/CHF. – MT is bear normal.
- Wait CAD/CHF. – MT is sideways normal.
- Wait NZD/CHF. – MT is sideways normal.
- Sell AUD/CHF. – MT is bear normal.
- Buy Gold. – MT is bull normal.
- Buy Oil. – MT is bull normal.
- Buy S&P 500. – MT is bull normal.
- Buy DAX. – MT is bull normal.
- Buy Nikkei. – MT is bull normal.
- Buy T-Notes. – MT is bull normal.
(MT = Market Type: Click for more information on market types.)
About the Author
Sam Eder is a currency trader and author of The Consistent Trader 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-industry traders (get a free trial). If you like Sam’s writing you can subscribe to his newsletter.