Aloha traders! It looks like we have a new theme developing this week in the markets. What we may be seeing is that the USD has strengthened too far, too fast. China has announced that it’s market is over priced and even said short selling of stocks is acceptable! Whoa!! I don’t believe it’s a geo-political thing as tensions are no greater than normal over the course of the week. When we look at the USD crosses, we see that every one had a huge week against the USD. I’m looking for a continuation of that theme for at least the next week, but am open to the market showing what it’s going to do.
Another theme I’m often seeing is what I call the ‘weekly trade’. Generally we see a signal within the first two days of the week which then plays out over the next three days or possibly even into the next week. Think about this: if you trade one or two pairs once per week with a 1.5:1 or 2:1 RR target AND you limit your entry signal to pin bars or the 50% candle retrace strategy, your account will grow substantially over the year. This is realistic trading and account growth. If you are unfamiliar with the strategies and methodologies I show in these posts, you may want to purchase the ForexMarketMaster Trading Course.
I would love to see some comments on what readers think of this analysis. Does it help you? Please comment below.
Let’s get started!
EUR/USD D1 Chart
The Euro looks like it’s headed back up for a test of 1.1000. It would not surprise if it breaks that barrier for a period of time. Although there is a very real possibility of euro ranging between 1.0500 and 1.1000 for a couple of months.
GBP/USD D1 Chart
The pound is more like the rest of the USD crosses: big week against the USD and looking for a temporary pullback. It looks like medium sized trading concerns are looking to build into this move up, so look for more gains against the USD.
AUD/USD D1 Chart
Aussie shows a bear candle at the end of the week, which means a greater chance of pullback into the move higher. This pair will play out much like the other USD crosses. Keep your ears to the macro news events, not CNBC. to determine if the USD weakness sentiment in the market is for real.
NZD/USD D1 Chart
Kiwi has had some pretty sweet moves the last few weeks. Good, actionable signals with good returns. Monday looks like an excellent opportunity for the 50% candle retrace strategy for a quick trip down to the overall 50% retrace level. Keep the risk small if you do decide to trade it. It could stop moving lower at 0.7600 or continue to ~0.7550 to pick up more value oriented orders looking for the ride back up. Personally, I favor waiting for the pullback to 0.7600-0.7550 and look for an excellent entry signal in that area.
USD/CAD D1 Chart
Loonie has given a solid pin bar to end the week on. There are a couple of ways this can go: 1) price jumps away from the go or 2) we see a pullback into Friday’s candle where we price would head north to the 50% pullback zone. That’s where we want to keep an eye out for an entry signal to short the USD.
In The News: