AUDCAD forex

Weekly Forex Outlook: April 2

Hello traders, happy Sunday! Last week was again an excellent week for reversal traders and there were many interesting setups in the market. I’ll review one trade I took in USDJPY and a sell in XAUUSD. Next week will be a little busier with non-farm payrolls on Friday and other economic news spread out over the week, but there are again many setups developing, so plenty to look at!

 

Current market behaviour

 

The dollar turned around this week. As you can see on the DXY chart, the dollar rallied for pretty much the entire week. Fuelled by positive economic news releases and a slew of FOMC member speeches, the dollar ended the week quite a bit higher.

 

DXY Daily

 

Although, we can see that the overall daily sentiment is still bearish, with the dollar index still making lower lows and lower highs. It wouldn’t be surprising if the rally of the past week was just a retracement in the larger timeframe picture, with the dollar continuing its path down soon again. On the other hand, if the dollar bulls can keep the momentum going, we might see more bullishness next week.

 

Market overview

 

Gold is inversely correlated to the dollar and so sold off for a major part of the week. However, Friday painted a different picture. Some FOMC member speeches were rather cautious, saying that the current positive market sentiment hasn’t yet resulted in improved economic figures. The market took this as dovish news and moved money to risk-off assets, such as gold. The result was a strong Friday rally on XAUUSD.

 

Finally, crude oil finally saw some improvement in trend structure. For the first time in a long time, we could see a clear trending market instead of the usual, skittish market behaviour we’ve been seeing in the past couple of weeks. Oil ended the week strongly higher.

 

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pin and drive

The pin and drive reversal entry trigger

As you might know, I’m mainly a reversal trader. I use other strategies as well, but my bread and butter setups revolve around swing trading reversals.

 

This article is about an entry trigger I often use for my reversal trades. I describe it in my trading plan as pin and drive, which basically means that if I see a pin bar followed by a drive in the opposite direction (a momentum candle, if you wish) AND some additional conditions are fulfilled, I have found that it is often a good trigger to enter a reversal.

 

But first, let’s make it clear what I mean with a chart:

 

Pin and drive reversal trigger examples

 

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NZDUSD

Weekly Forex Outlook: March 11

Another week has passed, so I’m back with my weekly trading outlook! Last week was quite interesting, with a couple of nice opportunities in the market. Most of the setups I mentioned last week didn’t yet materialise, though, so we needed to be patient. Since we always want to see some confirmation first, I just didn’t take any of those setups, which is fine. There were some interesting other opportunities in the market too.

 

Current market behaviour

 

The US dollar index saw some up and down this week. Initially, there was plenty of positive momentum to drive the dollar higher against the basket of other currencies. However, as the rate hike was priced in as an almost certainty (over 90%), there wasn’t a lot of news that could push the dollar higher. The NFP release on Friday was quite good – better than expected – but we saw a classic “buy the rumour, sell the fact” reaction. The dollar ended the week a bit lower than it opened.

 

Forex market outlook

 

Often, gold and the dollar will have an inversely correlated price pattern, but this week was different. Markets felt quite risk-on and equities have risen in the past week. This leaves money flowing out of the safe havens such as gold and the Japanese yen, which we could clearly see in the past week. Gold sold off almost the entire week to end sharply lower.

 

Finally, oil dropped below $50 a barrel in quite a strong move. In fact, we haven’t seen these prices since the OPEC production cuts were announced and it was the worst week for oil since November. This might be a move that’s not over yet, but we have to see what next week brings.

 

 

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XAGUSD Forex

Weekly forex outlook: February 19

Hi traders, I’m back with a preview of what I’m looking at for the upcoming week. The past couple of weeks has been good for reversal traders! Plenty of reversals materialised, often with very classic rounding tops and bottoms and clean retests to well-defined levels. Additionally, the WhaM strategy has also produced a couple of nice setups, one of which I’ll highlight in our past week review.

 

Let’s have a look at the overall market last week. The US dollar pretty much ended where it started. It did so, but not without a big swing up and down! After better than expected PPI numbers and a speech from Fed chair Yellen, the dollar rallied strongly. However, it found a (double) top on the next day and sold off quite a bit, only to regain some of the losses on Friday.

 

Gold shows us the opposite picture, with the market initially in a risk-off mode, where gold took a dive. Those losses were quickly recovered though and gold closed the week for a small gain.

 

Finally, oil sends us mixed signals. This week showed us disappointing crude oil inventory numbers, but then again the oil producing nations seem to hold their end of the production cut quite well, so the price is bouncing around.

 

Macro outlook

 

 

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AUDUSD buy

Weekly forex outlook: January 1

It’s the first day of the new year and I couldn’t be more excited about 2017! There are so many exciting things in the pipeline so I can’t wait to get going. But first, let’s pick up the weekly outlooks again.

Happy New Year

 

I’ve skipped last week’s outlooks since I wasn’t trading during the holiday period. Not trading during times of low liquidity (when most traders are not trading anyway) is always good advice, since you can really get unexpected and volatile moves if the market is so thin.

A prime example of this is a move that happened last week on Thursday, when the euro suddenly spiked up without any news announcements. Algo strategies are then often blamed, but regardless of the cause of this spike, it shows that your trades can very easily get wiped out during times of low liquidity.

 

EURUSD low liquidity spike

 

 

 

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EURUSD 4H

Weekly forex outlook: December 4

Another week has gone and we’re getting closer to the end of the year. Time flies!

 

The big item this week was the OPEC meeting on Wednesday. Many markets were in anticipation of a deal by the OPEC to cut oil production. The first couple of messages we got on Wednesday morning sounded hopeful, but it was still too early to tell. Later on the day, it was finally announced that an agreement was reached, and as expected the crude oil futures and CAD shot up (Canada, as one of the big oil producers of the world, benefits from an increase in the oil price).

 

As we speak, markets are preparing for the results of the Italian referendum on Sunday. A no vote for prime minister Matteo Renzi’s plans could potentially move the markets and bring further instability to Italy and the European markets in general. A bit of caution is therefore advised when you’re thinking of entering trades on Monday morning. Expect some volatility, gaps and sudden price moves.

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CADNZD

Weekly forex outlook: November 20

Last week was the first week after the US presidential elections, and the markets are starting to settle in their old rhythm again. There were some big moves last week, and I’m happy to see that my weekly forex outlook of last week was right on AUDCAD and AUDNZD. The GBP pairs didn’t really go anywhere but sideways, but that’s the unpredictability of the market for you.

 

The upcoming week

 

Noteworthy economic news for this week is:

  • Monday: ECB President Draghi’s Speech
  • Tuesday: CAD retail sales / US existing home sales
  • Wednesday: US durable goods / US new home sales / US FOMC minutes / EU manufacturing PMI
  • Thursday: German GDP
  • Friday: UK GDP

 

Keep in mind that the US markets are closed on Thursday and will close early on Friday. This is due to Thanksgiving day.  A closed US market usually means that trading slows down a bit and might result in a bit more unpredictable price behaviour. Have a look here to find out more.

 

Also note that the US dollar has been quite bullish recently. This is party because of investors anticipating that the Trump presidency will stimulate the US economy, but also because the December Fed rate hike is now almost a sure thing. Some of the pairs below are reversal setups that imply a bearish US dollar, so I will be extra careful in picking my trades for those US pairs.

 

This week, I’m keeping an eye on the following pairs:

 

Follow my published ideas on TradingView.

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