Hi, its the red flag news week of the month, culminating in NFP US jobs figures (which this week is on THURSDAY) so don-t get caught out!
If you are new, we NEVER trade NFP as its forex at its craziest.
The week starts fairly slowly regarding scheduled news as far as the majors are concerned.
The Cad could be difficult this week as there is red flag news on Tuesday, and its a bank holiday on Wednesday, followed by the US FOMC meeting minutes and then Thursday’s big event. However, I show in the video one way of trading it if there is a news spike.
The USD sees the quarter-end and surges in COVID in some states must concern the markets. In the UK Boris Johnson is repeating his threat that the UK will leave the EU without a deal, so its certainly a chance to see some movement this week, presumably down for the GBP.
In New Zealand, the central bank told us that they want a weaker NZD! so the 0.6500 should be even stronger now. In theory, the only reason it should go up is if the $USA weakens, this is what was said in their rate statement:
…it remains “prepared to provide additional stimulus as necessary”. Keeping the official cash rate (OCR) steady at 0.25%, the committee maintained “the balance of economic risks remains to the downside”. As the central bank “continues to prepare for the use of additional monetary policy tools”, uncertainty remains as to “whether the monetary stimulus delivered to date is sufficient to meet its mandate”.
Highlighting the “further pressure on export earnings” due to the recent “appreciation of New Zealand’s exchange rate” suggests the RBNZ may be considering future currency intervention, in combination with an expansion of the $60 billion Large Scale Asset Purchase (LSAP) programme, to continue to support the economic recovery.
Slow markets in the last few weeks has made trading the longer timeframes challenging. It may be that we have already arrived at summer “ranging markets.” If this week continues to see limited movement then we will need to adjust our tactics accordingly. If so, I will show you how to trade summer ranges once more at the end of the week.
Last week I explained that “the main pairs I have an issue with at the moment are the Gbp/$ and the €uro/Gbp”. I was concerned that there was not a good place for a stop (especially on the Euro/Gbp) from longer timeframes, but how I was looking to trade it using the M3 method.
I discussed this again in the live session on Tuesday as well as potential setups for the Nzd and a few others that also worked. To be successful as a trader you need to be flexible. If one method is temporarily not working as well, have another one in your locker 🙂
The live training session Here is a link to register for this weeks live training session which takes place on Tuesday 30th June at 11.00am London time (BST/GMT+1).
Then we can have a more detailed, up to the minute look at what’s happening and potential trades for the rest of the week.
If you are new, I use a “top-down” approach. I focus on trading from longer timeframes with my M2 method. I am looking for potential trade setups on weekly charts, areas that scream at me 🙂
I then go to daily charts looking for multiple reasons why I believe the price will react in an area.
I then look at the fundamentals and what is my bias for the week, ie $USA strength or weakness. Finally, I check which news releases are scheduled. Wherever possible I place orders at the market open and walk away or daily candle closes.
However, if you like to day trade, check out the M3 system in the Education section of the members area.
You still need to fully understand my M2 & Pierre’s Earth & Sky system before using this strategy.
Pivot points: Generally I only use the main ones, Monthly & weekly when trading the M3. However, if I see a decent setup on a pair and I am struggling for multiple reasons to place the stop I will check out where the pivots are. I don’t use all the time on the M2 because if you have emas, fibs, trendlines AND pivots, there is always something in the way and you end up with “paralysis by analysis” ie overkill!
The Forex Week Ahead
I show in the video how the Bollinger bands are closing up on a lot of pairs on daily charts, a sure clue that price is drying up. See the video as to how I use them for added confirmation to take a trade.
I will be out of the markets by Wednesday afternoon at the latest. Do not open new trades a few hours before or after the FOMC statement and definitely stay away from Thursday’s NFP release.
€uro/$: 1.1000 is the A grade trade for me, but 1,1100 is also a strong contender to long. Watch the Chf for confirmation. See the video for a full explanation. If it moves higher I will look to short at 1.1450. Intraday M3 traders watch 1.1400.
Chf: My bias is to short it. 0.9600 is the big area on a weekly either to short it or use it to confirm a long on the Euro/$- see the video and last Tuesdays live session for a full explanation.
Euro/Gbp: My bias is to long. I explained I was wary last week on longer timeframes, but I showed on Tuesday & Fridays catch up video how there were a number of opportunities to catch it last week using the M3 method.
The GBP Brexit situation on top of its debt mountain may mean we see more movement on this pair. I only want to long. I will scale in. Half at 0.9000 and the 2nd part at 0.8960- see the video.
Gbp/$: Bias is short. I was too conservative last week, it did the M2 pullback and dropped 200 + pips 🙁 and could now be on its way to 1.2000 and beyond. There is a good chance of a gap at the open, don’t be in a rush to enter if it does. A pullback is better, ideally to 1.2450. If it moves higher then I will short again at 1.2600. I will also watch the M3 for any entry- this may be the best chance.
€uro/Aud: Same as last few weeks and the Bollinger bands are closing too. Australian member Mark asked me to look at this in last Tuesday’s live session. I don’t usually trade it as the spreads can be too big at the daily candle closes BUT Mark is correct, 1.6600 is a big area to short with the added benefit of the 200ema just above for the stop and it has over 200 pips daily range. Last week it bounced to the pip off a weekly trend line after the drop. The trend line is at 1.6060 so watch there for a possible long and definitely at 1.5960/1.6000.
$/Yen: Still too messy for me. Too many EMA’s above. Leaving alone.
Cad: Same as last few weeks, but there is a lot of news that could screw with this. I show in the video how you can “set a trap” for this pair AFTER news comes out. I have two main areas for the Cad this week, long and short. The way I will play this is to split the orders in half and scale in. The principle is if you risk eg $100 on a trade usually, this time you place 2 x $50 trades.
The Cad to short I will do so at 1.3800 & 1.3825 & longs at 1.3070 & 1.3000. Remember any levels I post here I place long orders 10 pips above and shorts 10 below.
Nzd: Bias is short. Worked yet again last week when I said “Same as last week ……As expected it rejected once more at 0.6500 as per last weeks analysis. However, it spiked through so look there for M3 shorts.” I show in the video how it was a good M3 trade. There is nowhere to place a stop for me, so no forward order. If it breaks and closes above 0.6500 on a daily candle close we start to look for a long with a target of 0.6720.
To long I have a number of levels to look on smaller timeframes/ the M3 method: 0.6370, 0.6320 & 0.6250
Aud: Same as last week when I said “Broke higher, stopped at the HUGE area of previous support and resistance of 0.7000.” again it was an M3 due to a lack of a strong area to hide the stop. If it pulls back its another one I will look to split the entry/scale in 0.6730 & 6700.
As with the NZD. I would need a break and close above 0.7000 on a daily to think about a long on a move higher.
Yens: I show 3 of them in the video. I am only trading them using the M3 at the moment.
M3 Shorter timeframes
See the new course & recent blog posts in the member’s area 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 on to 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.
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Watch the video for more detailed explanations of this week’s detailed analysis and trade plan.
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