Hi Everyone,
I, Thinus and Marc had all cautioned you about the $ and that the bias is still to long $ until it breaks the trendline around 107. We did have a massive relief rally on the $ this week but it found support around 109.
Below are the posts where we cautioned you regarding taking longs on the Majors.
The EURO
It was a massive week for the Euro as they raised rates aggressively from 1.25 to 2 %. However, they have given us some clues regarding their plan on how they could raise interest rates forward.
Ex Bond trader Alf has broken it down to us in simple words in his latest article “a sudden change of heart?” You can read it using the link below
You can follow Alf on Twitter
You can also follow him on his websites where he posts his articles for free.
https://themacrocompass.substack.com/
‘‘We have made substantial progress in removing monetary policy accommodation, and we have to recognize there are clear signs of an economic slowdown in the Eurozone.’’
Christine Lagarde – ECB October press conference
On Monday the manufacturing and services figures showed us this slowdown as the figures were pretty bad and there are signs of stagflation. I had written an article on what is Stagflation some months back. You can read it below
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You can also follow Marc on Twitter https://twitter.com/marcwalton
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The Forex Week Ahead
The week ahead is jam-packed with news from Tuesday to Friday. You have the AUD rate statement on Tuesday, Wednesday FOMC statement, Thursday GBP rate statement, and then NFP to end it on Friday. Personally to me that looks a pretty tough week and could turn good trades into losers so I will look to trade as less as possible or just sit it out.
I am only looking to take A-grade setups like the CADCHF as an example and will look to leave the majors alone. The market has been giving more trade opportunities on the cross-pairs for many months. Don’t go looking for trouble but make sure you manage and trade around the news. You must have learned by now just because a country raises its interest rates doesn’t mean its currency will go up at that moment.
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MAJORS
My fundamental bias is still $ strength versus all majors. As ever keep watching the $ index for clues. Remember to watch the DXY and use it as a clue to measure Dollar strength.
Remember I am looking for “A” grade trades from weekly & daily charts that I can place the orders and then just walk away.
EUR/USD: Had warned several times during the week don’t long until we see where the weekly candle closes. What happened? it stopped below parity at 0.99650. Until and unless it doesn’t close above parity on a weekly and also breaks structure by taking out the previous high at 1.01820, I won’t long it. Let’s wait for this week to finish.
USD/CHF: A grade long at 0.95390. Multiple reasons.
GBP/USD: Technically it does look like it is going to reverse and head higher but better to wait for the GBP statement on Thursday. A pullback to 1,14026 for a long is attractive.
AUD/USD: Big news this week. A grade is to short at 0.66740.
NZDUSD: Very far away. Leave alone.
USD/CAD: Don’t touch where it is now. A grade long near 1.30 region, we have multiple reasons there.
CROSSES
EURGBP: On the weekly, it has stopped below the 200 MA. But on the daily it hasn’t and you can see it is near the 78.6% fib as well so it could reverse. Best to leave it alone until Thursday.
EURCAD: The short worked at 1.36830 this week. Could look to short there again, if it moves higher 1.3750 is much safer for a short.
EURNZD: Only interested to long at 1.6820
EUR/AUD: Very messy leaving alone.
GBPAUD: I would leave it alone this week as we have AUD and GBP rate statements.
NZDCHF: 0.60445 is now the major area but it’s its 250pips away. On the 4HR the current area at open is interesting for a long, as it’s closed above the 55EMA.
GBPNZD: 1.95660 is interesting for a long. Be aware its a very volatile pair and spikes alot.
AUDCAD: 0.88200 was the A grade short, its gone now.
AUD/NZD: A very slow pair but interesting to long at 1.09880.
CHF/YEN: 145.5 and 146.3 are interesting areas for a long.
GBP/YEN: Very volatile pair. If it closes above 165.280 on a monthly on Monday then this area look good for a long. We have multiple reasons there on 4 Hour.
CAD/CHF: 0.73500 is an A grade short for me.
AUDCHF: 0.64830 is an interesting area for a short.
As always, remember correlation!
We are NOT a “tipping service” our aim is to teach you how to trade for yourself.
Watch the video below for more detailed explanations of this week’s analysis and trade plan (click the 4 arrows bottom right to view full-screen):
Kind regards,
Ashley
