FX Renew End of Day Signals Order Sheet 22 April 19 – Resend

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FX Renew End of Day signals are trades based off our Weekly Trading Opportunities Report. Entry orders are set and trades are managed once a day in the hour after the US market closes, though there may be the odd time the trade needs management intra-day depending on the market. You will receive a more detailed update once a week containing strategy notes or a shorter update during the trading week if anything is required to be done with a live trade. 

Trade Management Updates

In this section we let you know any updates to existing or closed positions.

NO UPDATES TODAY

New Signals – Sell EURUSD

If there are any new trades you need to place you will find them here.

Here is a brief user guide.

  • Put an order to close 25% of your position on each profit target. If any of the targets say “trail” then don’t add a target as we are letting this portion run.
  • Entry orders on Tuesday to Friday are “market orders”. Orders on Monday are “stop” orders
  • You can view current trades in the Signals Matrix
Date Market Direction Entry Stop Target 1 Target 2 Target 3 Target 4 Method Market Type Quality Chart
22 April EURUSD Short 1.1145 1.1223 1.0410 1.0410 1.0410 1.0410 Breakout Sideways Normal A https://www.tradingview.com/x/NeNujc6k/

Trade Management notes

  • Scale in on new entries in the direction of the trend.
  • Lower the stop to keep the risk at R x number of positions (i.e. keep the stop wide) .
  • Close 50% of the position on a major reversal or fast MT.
  • Hold 50% of the position until the target.
  • Trail the stop tightly when closer to target. 
  • Otherwise keep the stop wide and trail it behind new highs. 

Bonus Trade idea – Sell NZDUSD

Strategy Notes

Strategy notes outline what we are looking to trade and why. For further analysis of the technical and fundamental picture you can read the weekly report or watch the weekly video. 

Brief Summary

The USD may be gaining some prominence. Data has been better than expected and we are getting the price action we want to see before a breakout. The best option to buy USD is vs. EUR where the divergence in monetary policy and economic performance is clearest. Additionally, with Brexit risks reduced in the near-term we await a short entry on EURGBP. I have also posted a bonus trade for the week ahead on NZDUSD.

USD (DXY)

Buy on a break above 97.70: The fundamental picture remains bullish for the USD with divergence in economic performance and monetary policy between the US and its main counterparts continuing. While the Fed is more dovish than it was, lets not forget rates are steady at 2.5% while others around the globe are lower and looking to cut or negative.  I suspect that we will get a resolution in trade talks between China and the US and that it will be Dollar positive. Bond yields have started bottom but still remain within the downtrend. Ideally, we want to see bond yields recover from here. A sideways quiet market type is forming just below the key breakout level. This is the type of price action we want to see if we are to trade the breakout. My preferred USD long is vs. EUR where divergence is most pronounced. 

GBPUSD

Wait. Bigger picture, once Brexit is actually resolved, much of the fall from 1.70 may well be undone. This leaves a move back towards 1.50-1.70 as a strong risk/reward opportunity. There may be buying opportunities from either 1.28 or 1.25. It is clear that a orderly Brexit is preferred by most parties and given the timeline is now until October, Brexit news may be a bit on the light side. This may make it a bit easier to trade GBP. Given the preference to short EUR, I prefer to look for selling opportunities on EURGBP instead of GBPUSD. 

USDJPY

Wait. Stocks are up and bond yields are starting to recover both of which suggest the currency pair will rise. There is dollar positive data. Technically we are stuck in the middle of a range that developed in 2017. The risk/reward is not good enough to buy the currency at the moment so its best to wait until the edge of the range at 115 for a selling opportunity. If the pair does fall to 104 or preferably 100 we will look to buy.   

AUDUSD

Wait. Rising metal prices, risk-on in stocks, positive China data and progress in trade talks are bullish for AUD. But the central bank is looking at cutting rates later in the year, perhaps August. Therefore we can expect the upside to be temporary unless the RBA changes it tune. There is bearish price action off resistance, despite the bullish breakout. With all the conflicting forces at play it is best to wait. 

EURUSD

Sell on a break below 1.12. The divergence in economic performance and monetary policy between Europe and the United States is clear. European data is tepid. In contrast US data shows signs of strength. While the Federal Reserve has become more dovish, the ECB has been talking about measures to support negative rates, suggesting that they are in no hurry to raise them. Technically, the consolidation that we wanted to see just above support is occurring. Volatility is at extreme lows in the EUR. This suggests that when we do get a breakout, it will be strong. We can trade a break below 1.12. 

NZDUSD

Wait.  We may get a rate cut from the RBNZ as early as May. Data has been supportive of this position. This, in combination with positive US data has driven the pair below key support. We can expect a move towards 0.66 or even 0.6450. 

USDCHF

Wait. The pair has broken through resistance but the risk/reward profile we need to buy the currency is not there. Best to focus on EURUSD instead. 

USDCAD

Wait. We remain within the longer-term uptrend. Oil remains in a bullish phase which is bearish the pair. I do expect USDCAD to head high but there is not a great risk/reward buying opportunity. 

EURGBP

Sell from 0.8720. Now that the risk of a hard Brexit is out of the way for the next few months, we can look to sell EURGBP. There is an opportunity for GBP to recover from the negativity that has been priced in since Brexit began. Meanwhile, the EUR has negative rates, a dovish central bank and consistently poor economic data. While the EUR may recover in the short-term, due to risk-on factors, this should be temporary and provides an opportunity to sell.  

A Note on the General Approach

The objective of the signals is to capture long-terms moves in the market. We use big picture technical and fundamental analysis to determine opportunities that have a superior risk/reward opportunity. We then stalk entry points where we can have a relatively tight stop. Once we are in a trade we look to add to the position in the early part of the move. We will take profit when conditions suggest, while holding a core position to our target. The goal is for the winners to be much greater in terms of R-multiple than the losers.

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