Weekly Analysis: Possible Hawkish $

by Ashley DeSousa | Aug 29, 2023 | Forex Analysis

possible

Im back from my holidays and had a good time in England, with the weather being more friendly this time 🙂

I explained before why we don’t trade the news and especially when there are red flag speeches. Friday was a prime example. The price shot up and down during Powell’s speech and ended up almost where it was originally. Hence I suggest always letting the dust settle and then taking action.

Last week the news was mixed. The Eurozone had very bad manufacturing figures for 3 consecutive months which does suggest they are in a recession. The UK also prints a number below 50 for their services PMI.

The US had a bunch of mixed figures with unemployment and production. Powell has been hawkish in his speech hinting he is ready to hike rates again but again that all depends on the upcoming data in the coming months.

Marctomarket has also summarised the market for the week ahead which you can read below

Softening EMU Inflation

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

For the week ahead on Wednesday morning you have the AUD CPI which will be quite important for the RBA to assess. Also, pay attention to ADP figures as lately, it has been a market-moving figure. Lastly on Friday which I advise to definitely NOT trade is the NFP news, which is forex at its craziest. So try to be out of any trades before that is out or lock in your profits for the week so that you don’t take a loss.

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: If it shoots up to 1.0940 I will watch on 4hr for a short. If it closes below the 200 and 55 then I will look to short there.

USD/CHF: An upper trendline in the way so leaving it alone for now. Watch the DXY for clues.

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

GBP/USD: 1.2500 looks very attractive for a long for multiple reasons.

AUD/USD: 0.6630 is a B grade, watch the video.

NZDUSD: Similar to the AUD. 0.6200 is interesting and on a shorter timeframe 0.6080

USD/CAD: Interested to long at 1.33700.

USDYEN: BOJ could intervene again as it’s approaching the previous highs. I’m leaving it alone but areas of interest to long are 142 and 138. Its very probable that the BOJ will intervene to strengthen the Yens if the $/Yen gets much higher. ALl possibilities explained in the video.

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: Looking to split the order to short at 0.8630 and 0.8645

GBPAUD: 1.9350 is an interesting area too long but it’s a wild pair.

EURAUD: Correlated with GBPAUD so pick one, is interesting to long at 1.66

EURCAD: Far away but 1.44950 for an A grade long.

AUDJPY: Forward order in the same region as last time 92.10

NZDCAD: 0.8265 is an area of interest to short.

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,

Ashley

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