Weekly Analysis: Further $ weakness

Last week we saw the Dollar drop further after the weak CPI figures. It has given a clue that inflation is cooling down in the U.S. However I showed you in the video on shadow stats, calculating it the old way inflation is still around 8%. They claim that healthcare insurance is down 34% but this is nonsense and BS to try and bring the figures down.

The DXY has closed below weekly 55 EMA. This indicates further dollar weakness. If you want to read more on the fundamentals and clues for next week on other currencies, I suggest you read Marc Chandler’s articles. He is very experienced and knows what he is talking about.

The Pendulum of Fed Expectations Swings Too Hard

Dollar Consolidates Amid Rate Volatility

Below is his latest post:

Yen Leads Charge Against the Dollar Amid Falling Rates

They should take around 5 min each to read. I also suggest reading James’ new article on the Euro. He has explained the importance of the EUR in the global economy and how it provides stability in the FX markets and also as role one of the major reserve currencies. Check his article out below

Euro Fundamentals in Forex Trading

The Forex Week Ahead+++++++++++++++++++++++

For the week ahead AUD looks busy during the start of the week as Gov Bullock speaks and also Policy meeting minutes. You also have the CAD CPI on Tuesday so make sure to not trade the CAD before that. Manufacturing figures for Europe will be crucial on Thursday so keep an eye on that, and also the GBP. The USA has a bank holiday on Thursday so the NY session could be very slow.

 

MAJORS

Keep watching the $index it is now at a major “make your mind up” area once again on the weekly charts. It is now stuck at the 55EMA and you have the 200 EMA just above it. If it could break above that we could be looking at $ strength.

Remember I am looking for “A” grade trades from weekly & daily charts that I can place the orders and then just walk away. A “B” grade is one that I will watch on 4 hour timeframes to see how it reacts if it hits my zone.

EUR/USD: It has broken above EMAS but for me its one to watch. An area to long would be 1.07460

USD/CHF: Finally a breakthrough. 0.8970 and 0.9020 are areas to short on pullback.

Do not take the Euro/$ & Chf at the same time. They are correlated so it’s the same “bet.”

GBP/USD: Similar to the EUR, but this is one is little messy. Watch the video where I show a possible 4hr set up.

AUD/USD: 0.6680 is an interesting area for a short. Watch the video.

USD/CAD: Worked perfectly this week. Looking for a long again at 1.3660, but will half my risk.

USDYEN: The BOJ is very likely to intervene again so I wouldn’t bother playing around with it. Why try to fight a bank? You won’t win.

CROSSES

Some are A grades where I will place forward orders, most pairs have “areas of interest.” I have a lot of similar crosses so be very careful with the correlation.

EURGBP: Worked perfectly 2 weeks ago. Looking to long again at 0.8670 and 0.8660

GBPNZD: Prefer this one over the GBPAUD, Long at 2.04300 looks attractive for multiple reasons.

GBPCAD: Finally broken through the EMAS, 1.68300 would be interesting for a long.

EURCAD: Finally broken above EMAs on a weekly, so possibly longs at 1.45 again.

EURNZD: 1.76700 looks good for a long. Potential 600 pip move.

AUDCAD: Break of trendline so possible 200 pip move to the upside, watch the video.

As always, remember correlation! 

M3 -Shorter timeframes.

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.

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,
Marc