Forex Trading Opportunities for the Week Ahead 17 December 18

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I plan my trading for the week ahead each weekend. Here are the Forex trading opportunities I will be stalking this week.

Note that this is my current view, but if market conditions change my view can change too. Generally I will trade in alignment with what I have noted here, though I will wait for a set-up before I enter. I base my view on technical and fundamental information. This is my beliefs and you are welcome to have opposite ones. Having a plan is more important than the actual direction for me. 

  • Wait DXY.  – MT is sideways normal. The dollar remains broadly range bound – though pressing the highs –  in anticipation of the FOMC announcement on the 19th. A rate hike is expected and what will matter is the outlook. If the Fed reaffirms the positive outlook and the prospect of 3-4 rate hike in 2019 goes up, it should be enough for the currency to reach new highs. If they come in dovish and acknowledge global and domestic risks to the outlook then we may see a decent fall in the pair, given that positioning looks to be quite dollar long.
  • Sell GBP/USD. Trend – MT is bear normal. May has survived a no confidence vote but has had no luck in getting further concessions from the EU to bolster her chances at home. Given the failure to get her plan through (at this stage) we can expect sentiment to remain negative right though to March. There does not seem a great will to get a deal done by either party unless it fits their terms so “brinkmanship” is to be expected and any deal will probably come at the last minute.
  • Wait USD/JPY. – MT is sideways normal. US stocks are starting to break down and join their global counter parts in weekly bear MT’s. The BOJ left policy roughly unchanged. I do favor the downside in the pair if we break below 112.00.
  • Wait AUD/USD. –  MT is sideways normal. The Aussie continues to sell-off from the 0.73 level. China data was poor and risk-off sentiment is weighing on the pair. Look for a continuation of the move towards 0.70.
  • Wait EUR/USD. –  MT is sideways quiet. The EUR continues to consolidate after rejecting 1.1300 but is pressing the lower end of the range on the back of a dovish ECB and poor data. It is likely the FOMC will make or break the pair. I am positioned long at the moment but a break below 1.12 on a hawkish FOMC presents a selling opportunity.
  • Wait NZD/USD. –  MT is sideways normal. The kiwi has shifted back into a sideways MT on the back of poor china data and risk-off sentiment. Note that the RBNZ is looking at raising capital requirements on banks, which, while prudent, will mean that banks will likely have to have higher interest rates to maintain profitability.
  • Wait USD/CHF.  – MT sideways quiet. The SNB reiterated that it’s long standing dovish stance and willingness to intervene in fx markets. Given the fall in stocks we might have expected CHF to strengthen, but is has not. Wait for now.
  • Wait USD/CAD. – MT is bull normal. We remain right on resistance and you get the sense the FOMC will determine the direction from here. Oil prices has stabilized somewhat but they have not yet recovered. CAD is holding up vs. the USD a bit better than it counterparts. Wait for now.
  • Wait EUR/GBP.  – MT is sideways normal. Volatility remains high and we are pressing the top of the weekly range. Sentiment should remain bearish GBP but the move is extended and we are at resistance so a bit of a sell-off from here should not be a surprise.

Crosses

  • Sell EUR/CHF. Trend – MT is bear normal. Continue to sell.
  • Wait AUD/JPY. – MT is sideways normal. Wait.
  • Wait NZD/JPY. – MT is sideways normal. Wait.
  • Sell GBP/JPY. Trend – MT is bear normal. Look to sell.
  • Wait EUR/JPY. – MT is sideways quiet. Wait.
  • Sell CAD/JPY. Trend – MT is bear normal. Continue to sell.
  • Wait CHF/JPY.  – MT is sideways normal. Wait.
  • Sell GBP/NZD. – MT is bear normal. Continue to sell.
  • Wait EUR/NZD.  – MT is sideways normal. Wait.
  • Sell AUD/NZD.  Trend – MT is bear normal. Continue to sell.
  • Wait EUR/AUD. – MT is sideways normal. Wait.
  • Wait GBP/AUD. – MT is sideways normal. Wait.
  • Wait AUD/CAD.  MT is sideways normal. Wait.
  • Wait GBP/CAD. –  MT is sideways normal. Wait.
  • Buy EUR/CAD. Trend – MT is bull normal. Continue to buy.
  • Wait NZD/CAD. – MT is bull volatile. Wait.
  • Sell GBP/CHF. – MT is bear normal. Look to sell.
  • Sell CAD/CHF. Trend – MT is bear normal. Continue to sell.
  • Wait NZD/CHF.   MT is sideways normal. Wait.
  • Sell AUD/CHF. Trend – MT is bear normal. Look to sell.

Other Markets

  • Wait USDSGD.   – MT is sideways normal. Wait.
  • Sell USDCNH. Trend – MT is bear normal. Look to sell.
  • Buy Gold. Trend – MT is bull normal. Look to buy.
  • Wait Oil. – MT is sideways normal. Wait.
  • Sell S&P 500. Trend – MT is bear normal. Look to sell.
  • Sell DAX. Trend – MT is bear normal. Continue to sell.
  • Wait Nikkei. – MT is sideways normal. Wait.
  • Buy T-Notes. Trend – MT is bull normal. Continue to buy.

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(MT = Market Type: Click for more information on market types.)

Trend: Market is trending in the direction I have listed and I expect it to continue. 

Reversal: I am looking for a reversal against the current trend.

Breakout: The currency pair is breaking out of a range. 

About the Author

Sam Eder is a currency trader and author of the Definitive Guide to Developing a Winning Forex Trading System and the Advanced Forex Course for Smart Traders (get free access). He is the owner of  www.fxrenew.com a provider of Forex signals from ex-bank and hedge fund traders (get a free trial). If you like Sam’s writing you can subscribe to his newsletter.

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