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 bull normal. In the past week the absence of dovish Fedspeak and better than expected Durable Goods Orders and Advance GDP have helped the Dollar Index move higher toward testing resistance at 98. The coming week is data heavy with FOMC and Non-Farm Payroll the main acts. A rate cut from the Fed seems a done deal – and that would be the first cut in 10 years – but it is not guaranteed that the index will be pushed lower. After all the US economy while it is slowing it’s still healthier than its global peers.
- Sell GBP/USD. – MT is bear normal. Boris Johnson has become the 14th UK Prime Minister since Queen Elizabeth ascended to the throne 67 years ago and he promises to deliver Brexit by the October deadline with or without a deal. Meanwhile, the EU maintains that the deal struck with Theresa May won’t be renegotiated. The Pound closed the week just below 1.24 support and the long-awaited recovery seems to be still some way off. The BOE meets this week but no changes are expected.
- Wait USD/JPY. – MT is sideways normal. The pair is re-testing resistance at 109 and frankly a break higher is not to be excluded. The BOJ meets on Tuesday but no material change in rates and guidance is expected. We remain open to trade either a break of the range or a reversion into it.
- Sell AUD/USD. – MT is bear normal. The move higher above .70 did not materialise and the recent strength in the USD has been matched by a broad weakening of the commodities dollars. In the coming week a string of domestic economic data – Dwelling Approvals, CPI and Retail Sales – might provide some more downside momentum toward support around 0.68. Chinese Manufacturing PMI will also be influential for the Aussie.
- Wait EUR/USD. – MT is bear normal. The ECB has delayed introducing any new stimulatory measure at least until September, however president Draghi noted that the outlook is getting worse. The pair found support at 1.11 and closed the week around the 2 year low. If we see a bounce up from here in the coming days a good spot to look for a short toward 1.12.
- Wait NZD/USD.– MT is sideways normal. The Kiwi also failed to move higher, finding resistance just below 0.68, however contrary to the Aussie, has not yet made a lower low and therefore technically the recent uptrend remains in play. The only data point to watch in the coming week is the ANZ Business Confidence Survey.
- Wait USD/CHF. – MT is sideways normal. The downtrend started in May appears to have run out of steam and the pair is in a period of consolidation. With the persistent buoyancy of the US stock market keeping spirits high the possibility of an upside break is not to be excluded. The Fed meeting and non-farm payroll are due later in the week, significant moves in either direction are not likely until then.
- Buy USD/CAD. – MT is bull normal. The Loonie has printed a bottom, at least for the time being, just above 1.30 from where it started moving higher closing the week with a test of 1.32. Aside from the Fed meeting and NFP, Canadian GDP and Trade Balance are also potential market moving releases for the pair this week.
- Wait EUR/GBP. – MT is sideways quiet. Following the Evening Star reversal pattern mentioned last week the pair did move lower but recouped all the losses into the week’s close. A likely scenario over the next few days is a period of consolidation with the market trying to re-test the recent high.
- Sell EUR/CHF. – MT is bear normal.
- Sell AUD/JPY. – MT is bear quiet.
- Wait NZD/JPY. – MT is sideways quiet.
- Wait GBP/JPY. – MT is bear normal.
- Wait EUR/JPY. – MT is bear normal.
- Wait CAD/JPY. – MT is sideways quiet.
- Wait CHF/JPY. – MT is sideways quiet.
- Sell GBP/NZD. – MT is bear normal.
- Wait EUR/NZD. – MT is bear normal.
- Wait AUD/NZD. – MT is bear normal.
- Wait EUR/AUD. – MT is sideways normal.
- Wait GBP/AUD. – MT is sideways normal.
- Wait AUD/CAD. – MT is sideways normal.
- Sell GBP/CAD. – MT is bear quiet.
- Wait EUR/CAD. – MT is bear 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.
- Wait AUD/CHF. – MT is sideways normal.
- Buy Gold. – MT is bull normal.
- Sell Oil. – MT is bear normal.
- Wait S&P 500. – MT is sideways normal.
- Wait DAX. – MT is sideways normal.
- Wait Nikkei. – MT is sideways normal.
- Wait T-Notes. – MT is sideways normal.
(MT = Market Type: Click for more information on market types.)
About the Author
Massimiliano Andrighetto is a currency trader and member of the team at FxRenew. If you like his writing you can follow it here. You can also get Free access to the Advanced Forex Course for Smart Traders.