Hi guys,
The FOMC statement this week seems to have given the markets a nice injection of volume and volatility and there are some really great setups forming. FOMC sets strong Dollar for February
I have tried to give you multiple ideas, varying between traditional M2, intraday and countertrend setups, so there should be plenty of opportunity this week.
A really, really busy week from a forex news event point of view, but the BIG one to watch out for is definitely the Non-Farm employment numbers from America on Wednesday. This happens on the first Wednesday of every month, if you would like to make a note. …there is also an OPEC (oil producers) meeting on Wednesday, just to keep things interesting 🙂
I often get asked how I use the fundamental news to help me trade and the best explanation I can give is that it is like forming a story in your mind. The story doesn’t always form, or act out quickly, and usually develops over time.. but if you stack the clues, you have a good chance to get right where things are probably going to go. The skill lies in knowing when the story is changing or not turning out as you expected and adapting.
The fundamental ‘story’ I’m building is still medium term USD strength…Why?
– Interest rate hikes (expected for March) should be good for the dollar.
– Continued uncertainty around Russia and their invasion into Ukraine means people will turn to ‘safe haven’ currencies -like the dollar/yen/swiss franc.
– Covid is still very much a factor around the world, especially in Europe – this creates uncertainty…which the markets don’t like.
– DXY chart is still bullish.
– VIX chart is bullish (uncertainty again).
So what are traditionally the secondary consequences of a strong dollar:
– Weaker commodity prices ( USD is the pricing mechanism for most commodities).
– Which economies rely heavily on commodity exports …..?
Once you know what you are looking for in the news, it really doesn’t take a long time to keep up to date and acts as a super valuable filter when doing your weekly analysis….
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MAJORS
EUR/USD: A grade short for me is still a short from 1.1600. Intraday, have a look for entry’s at 1.1350
USD/CHF: Nice clear breakout above 0.9200. I’ll be looking for a pullback back to this area. Countertrend opportunities from 0.93800
GBP/USD: Stopped, almost to the pip, at the big 1.3400 area. I’m looking for a pullback to test the trendline before looking for shorts. See video for details.
AUD/USD: A grade short from 0.7300, Intraday look at the 0.72000 area.
NZD/USD: Similar scenario to the AUD pair (Correlation!), looking to short from 0.68000. Countertrend opportunities from 0.65000
USD/JPY: Looking for A grade long from 111.700. Intraday I’d be looking at 114.200
USD/CAD: Looking for price to get back to 1.26500. Countertrend opportunities from 1.28500
CROSSES
EUR/GBP: A grade short from 0.85300. Intraday look at the 0.85300 area.
EUR/CAD: A grade short from 1.4600
GBP/CAD: Looking at the weekly chart, a short from 1.7200 looks really interesting.
GBP/AUD: A grade long from 1.85400. –Intraday, I’m looking at 1.87500 for a long and countertrend opportunities from 1.9400
AUD/CAD: 0.92500 is an A grade short for me. Intraday look at 0.91000
EUR/JPY: Stop looks a bit wide on the daily, but a short from 129.00 on the 4H looks interesting.
AUD/NZD: I’m looking for a clear break and pullback to 1.06900 to long.
As always, remember correlation!
M3 -Shorter timeframes.
See the new course & recent blog posts as to how I do this: I do my analysis on daily and weekly charts first and make a note of the MAJOR areas of support and resistance. Then copy them onto Pierre’s Earth and sky template. Then I make a note of the weekly & monthly pivots points and add them to the charts. You will see lots of opportunities line up during the week. The important thing then is to select a bias for the next few days and do NOT take trades if the price is too near a trend line or pivot. Ideally, you want to buy when the price is near a major support and or pivot point line and has the potential to make at least 40 pips. Vice versa for a short.
New members, please note: If I am looking to take a trade long, for example, 1.5000, I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.
We are NOT a “tipping service” our aim is to teach you how to trade for yourself.
For more up to the minute, updates do not forget to drop by the forum. Ashley is back from his travels and there are other senior members who are happy to help.
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Watch the video below for more detailed explanations of this week’s analysis and trade plan:
If you only want to see my trading ideas for the week ahead they start about 9 minutes into the video. To see the video full screen click the box bottom right corner.
