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. After taking out support, EUR weakness may drive DXY back towards the top of the range. The key development in the dollar in the last week was the more dovish then expected FOMC meeting. Any chance of a rate hike was pushed out to 2020. The key point to note is the response to this by the market. While we saw an initial sell-off in the dollar support at 95.80 held and we are now trading back above pre-event levels. When the market ignores negative news this can be a bullish sign. USD has also benefited from some safe-haven flows. Stocks fell on Friday and the technical suggest we could see a further fall from these levels. This is compounded by a lack of progress in trade talks with China. Overall I suspect we may be heading back towards the top of the range.
- Wait GBP/USD. – MT is sideways volatile. A short Brexit extention was granted until April 12th by the EU. There are two schools of thought, both revolving around May being unable to get a deal done by 12 April. Firstly, there is the chance of the EU granted a much longer extension, possibly for 1-2 years. Secondly, there is the chance EU members just want to get this over with and there will be a hard Brexit. While option A is more likely, option B is a real chance. We don’t want to gamble with our money and considering the illiquid conditions that will arise if there is a hard Brexit, it may well be worth staying away from GBP for the next little while.
- Sell USD/JPY. – MT is bear normal. With bond yields falling and stocks struggling at resistance, USDJPY is a clear selling opportunity.
- Wait AUD/USD. – MT is sideways normal. Mixed employment data, lack of trade talk progress and risk-off are all keeping a lid on the pair. Recall that the RBA may cut rates this year and you get the picture that AUD is not the best buying opportunity. Support will be found at the key 0.70 level and it may be tested this coming week.
- Wait EUR/USD. – MT is sideways normal. After bouncing off the key 1.12 level, the pair failed to break above 1.14 despite a more dovish than expected Federal Reserve. This is because the run of poor data in the Eurozone continues. There is now talk of a recession. Note that the poor data is not just in the periphery, its right there in Germany. I would not be surprised to see 1.12 tested again and possibly broken. I was looking to sell from 1.1550 but we may not get back up there. Otherwise we can look to sell on a break of 1.12.
- Wait NZD/USD. – MT is sideways normal. The Kiwi still looks one of the best options. Dairy prices were up and there were good GDP numbers in the last week. We are near-ish the top of the range and there was a bearish long-tail Doji on Thursday. I think we need to be continue to wait for a good technical set-up.
- Sell USD/CHF. – MT bear normal. Risk-off flows, and a bearish EURCHF are keeping the pair under pressure. While we have broken out into a bear MT, we need to see a move through 0.99 before selling.
- Buy USD/CAD. – MT is bull normal. Poor data has seen the pair hold onto the bull MT. Oil is coming under a little pressure and there is the thought that the BOC will need to adjust it’s stance to become more dovish. Look to buy.
- Sell EUR/GBP. – MT is bear normal. There is a lot of volatility in the pair between 0.87 and 0.85. While long-term I do think the pair is a short, the risk is high at the moment so best to stay away.
- Sell EUR/CHF. – MT is bear normal.
- Sell AUD/JPY. – MT is bear normal.
- Wait NZD/JPY. – MT is sideways quiet.
- Wait GBP/JPY. – MT is sideways normal.
- Sell EUR/JPY. – MT is bear normal.
- Sell CAD/JPY. – MT is bear normal.
- Wait CHF/JPY. – MT is sideways normal.
- Wait GBP/NZD. – MT is sideways normal.
- Wait EUR/NZD. – MT is sideways normal.
- Sell AUD/NZD. – MT is bear normal.
- Wait EUR/AUD. – MT is sideways quiet.
- Wait GBP/AUD. – MT is sideways normal.
- Buy AUD/CAD. – MT is bull normal.
- Wait GBP/CAD. – MT is sideways normal.
- Buy EUR/CAD. – MT is bull normal. Low conviction.
- Buy NZD/CAD. – MT is bull normal.
- Wait GBP/CHF. – MT is sideways normal.
- Sell CAD/CHF. – MT is bear normal.
- Wait NZD/CHF. – MT is sideways normal.
- Sell AUD/CHF. – MT is bear normal.
- Wait Gold. – MT is sideways normal.
- Buy Oil. – MT is bull normal.
- Sell S&P 500. – MT is bull normal. Reversing off key resistance.
- Sell DAX. – MT is bear normal.
- Sell Nikkei. – MT is bear normal.
- Buy T-Notes. – MT is bull 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.