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 price action we are seeing on the dollar index is constructive. A sideways quiet MT just below resistance is what we want to see before a breakout. The fundamentals are lining up as well. There is clear divergence in economic performance between the US and it’s major counterparts, in particular Europe. Trade talks with China are progressing with more positive sound bites which is bullish USD. Continue to be patient in these market conditions but be ready to trade a break through resistance.
- Wait GBP/USD. – MT is sideways normal. GBP has closed below the key 1.30 figure, but has not broken through support. Data has been decent out of the UK. There has not been much news on Brexit. The recent move seems to be driven by the USD leg of the pair. If GBPUSD breaks through support then we can expect a move back to 1.28.
- Wait USD/JPY. – MT is sideways normal. It was a quiet week for USDJPY. The pair barely moved, consolidating below resistance at 112.00. Stocks have not done much either. Wait for now.
- Wait AUD/USD. – MT is bull normal. Despite just holding onto the bull MT, so far the pair has failed to gain any momentum and failed to break through the key 0.72 figure. A evening star candlestick reversal pattern has formed. There was an employment number beat, but it is probably not enough to change anything just now. RBA minutes indicate that a rate cut may be on the cards. Westpac is calling for this to happen in August. Another positive note was good China data. While there are some conflicting forces in play, USD strength, a dovish RBA and bearish price action suggest that there is not much upside potential here.
- Wait EUR/USD. – MT is sideways normal. The EUR is consolidating near key support at 1.12. This is the type of price action we want to see before a breakout. European data has been poor, in contrast with US data. Yields are in favor the USD and the ECB is likely to keep rates negative for longer. Volatility in the Euro has hit all-time lows. This suggests that when there is a breakout, it will be strong. Look to short the pair below 1.12.
- Sell NZD/USD. – MT is bear normal. Support has now been broken. There was poor CPI data in NZ which was followed by the US retail sales beat. There is the chance of a rate cut in May. This will weigh on sentiment. Look for a move towards 0.6580.
- Wait USD/CHF. – MT sideways normal. The pair has busted through resistance at 1.0130. EURCHF has been rising rapidly, stocks remain bullish and there is broad-based USD strength. Watch out for any bearish candles that form on key resistance like this, but otherwise we can expect the pair to move towards 1.03.
- Wait USD/CAD. – MT is sideways quiet. CAD remains within the sideways quiet MT. While data was good out of the US, it was good out of Canada too. While a breakout from this MT could be a good trading opportunity, I think there are better. Note there is a BOC meeting coming up.
- Wait EUR/GBP. – MT is bear normal. The pair is trapped in a range between 0.8730 and 0.8480. Volatility has died down a bit. In this MT selling from the top of the range makes sense.
- Buy EUR/CHF. – MT is bull normal.
- Buy AUD/JPY. – MT is bull normal.
- Wait NZD/JPY. – MT is sideways normal.
- Wait GBP/JPY. – MT is sideways normal.
- Wait EUR/JPY. – MT is sideways normal.
- Wait CAD/JPY. – MT is sideways normal.
- Sell CHF/JPY. – MT is bear normal.
- Wait GBP/NZD. – MT is sideways quiet.
- Buy EUR/NZD. – MT is bull normal.
- Buy AUD/NZD. – MT is bull normal.
- Sell EUR/AUD. – MT is bear normal.
- Sell GBP/AUD. – MT is bear normal.
- Wait AUD/CAD. – MT is sideways normal.
- Sell GBP/CAD. – MT is bear normal.
- Wait EUR/CAD. – MT is sideways normal.
- Sell NZD/CAD. – MT is bear normal.
- Buy GBP/CHF. – MT is bull normal.
- Buy CAD/CHF. – MT is bull normal.
- Wait NZD/CHF. – MT is sideways normal.
- Buy AUD/CHF. – MT is bull normal.
- Sell Gold. – MT is bear 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.
- Wait T-Notes. – MT is sideways normal.
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(MT = Market Type: Click for more information on market types.)
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.