Hi, the after effects of the G20 meeting & any impact on currencies will not be known until after the market opens. Its also a MAJOR news and speech week, the most important likely to be The FOMC meeting minutes and Draghi’s testimony to the ECB not long after the New York open on Monday, so as ever be careful around those. Don’t open new trades before, during and immediately after and close or move stops to protect open trades.
The Forex Week Ahead
Price is still at extremes on many of the majors and the Yen train left the station weeks ago so what do we look for in the week ahead? In 2014, because I am paying a lot of attention to global macro, fundamental analysis (like that posted by Judith on a Thursday) I have been trading a lot of non major pairs.
This week I am waiting for pull backs on most majors (and suspect some could be bigger than expected), I am ignoring the Yens & see some opportunities on the Euro/Cad, Gbp/Cad & Nzd/Cad to name but a few.
Gbp/$ Better opportunities elsewhere for me. At an extreme now, I need a pull back and a big one but there has been a drip drip of negative Gbp data of late so it will need some kind of unexpected release either side of the Atlantic to trigger it. 1.6160 is worth a forward order but I doubt we will get there. Another obvious one is 1.6000 and if you are trading smaller time frames keep your eye on 1.5940
Gbp/Cad: I have been explaining for months why I have been shorting at 1.8150. It did again four in recent weeks and last week I caught a 300 pipper which was great, then price moved another 150 which is a little frustrating BUT support held at 1.7820 for 2 days, so no regrets.
To short, that will be the first place to look for multiple reasons: fib. Monthly 55ema, previous strong support & resistance, trend line not far above. If that fails I will short again at 1.7970. Counter trend/swing traders will be looking for longs at 1.7520 BUT keep your eye on news and fundamentals. If Gbp data is weak and Cad positive price could slice straight through
Euro/$: Nothing has changed fundamentally. Still only looking to short. I Need a pullback. Its still at a10 year trend line and bullish candle stick pattern on weekly so not shorting in current position. 1.2800 is best entry for me OR a clear break and daily candle close below 1.2340 followed by a pull back.
Chf: 0.9525 has multiple reasons to long BUT if we are going to see deeper pull backs that won’t hold. I will long if price pulls back to 0.9450. Those trading intraday on 4 hour charts watch 0.9520 for a possible bounce back up.
Euro/Gbp: Pulled back on Friday. .8000 is still the key area BUT Draghi’s testimony to ECB on Monday and Gbp bank rate votes will be important here. If price does break and close above 0.800 then I will definitely short at 0.8080, just below the trend line that has held price for over a year
Euro/Cad: Shorting at 1.4360, it worked last time for 300 pips. It has multiple reasons once more, see the video. Swing traders will be interested to long at 1.4000, it only needs a small stop so I might take that – I am not usually a “swinger” J but it has a good risk reward.
Nzd/Cad Missed my short entry less week by a fraction of a pip L. WAIT until after NZD retail sales announcement. If no major difference I will look to short at 0.8975 this time for multiple reasons.
Aud: My possible 600 pip flag pattern break out from 2 weeks ago only gave 200 pips and I am a little wary with this pair now. Commodities are still falling but gold bounced on Friday and Chinese news over the weekend could see a bigger pull back now.
Forward area for me is 0.9000. Intra day watch current area and 0.8920 for clues to short.
Cad: Hopefully my advice to stay out of longs near recent highs kept you out of losers. The monthly candle close is a spinning top/indecision one, again I am waiting for a pullback. I have a forward order to long at 1.0900 but that’s a long way back. Intra day 1.1180 is where I will watch on 4 hour charts, if that breaks then next line in the sand is 1.1020
Yens: Went crazy last few weeks, they are “speeding trains” best advice is walk away and leave them alone until they settle down. Could whipsaw back down any minute.
New members please note. If I am looking to take a trade long, at 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.
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