Forex Outlook: 5 Top Setups For The New Week

👋 Hi traders! After another week of trading, it’s a wrap! It was quite a challenging week with a trade in USDNOK not working out but a good trade in AUDCHF that resulted in a 2R profit. However, we still managed to come out on top and end the week with a profit. 💪

 

As we prepare for the new trading week, I want to share a number of setups that are part of the Trade Advisor program. The students actually got 12 setups and this is a selection of 5 of those setups. I hope you find them useful!

 

If you want to learn everything about the strategy, including how to place stop loss and take profits and how to manage trades, check out the program (which currently has a one-week free trial)! Have a good trading week everyone!

 

The upcoming week

 

It’ll be an average week. There are a few events that should have your attention, but nothing too special. Monday starts off with a holiday in Japan (Marine day). On the US front, however, we do have retail sales data to take into account.

 

Tuesday has some data releases from New Zealand (CPI) and Australia (RBA meeting minutes), but the two main items are the unemployment numbers from the UK and a speech by US Fed chair Powell. Wednesday doesn’t slow down, with GBP and Euro CPI, building permit data from the US and again, a speech by Fed chair Powell.

 

Thursday gives us employment data out of Australia and retail sales from the UK. Finally, the main items on Friday are Canadian retail sales and CPI data. Here is the overview for next week:

Real Time Economic Calendar provided by Investing.com.

 

I’m looking for setups on the daily, 4H and 1H time frames.

 

Keep in mind that these are potential setups, not entry signals! They might materialize into a tradable setup, but only once certain conditions are fulfilled. Please read the explanation of each setup carefully.

 

For this forex outlook, I’m keeping an eye on the following pairs:

 

Summary Of Setups

 

  • AUDNZD 1H short 1.0952
  • EURAUD 12H short 1.57
  • GBPUSD D long 1.33
  • USDCHF 1H short 1.0015 with a condition
  • USDJPY 1H short 112.3 with a condition

 


 

AUDNZD 1H short

 

Personally, I would prefer to see the price move up to the 1.099 level because that was the swing high of the previous trend and this would provide us with a strong resistance. However, we still have a nice trend right now too and it’s worth having a look at.

 

The price is respecting the moving average very well, it’s a steady uptrend with clean trend waves. More recently, there’s been a little RSI divergence but nothing too strong. However, if the price manages to break and close below the 1.0952 level, there is a clear shift in direction so it should be a good opportunity to go short.

 

 

 

EURAUD 12H short

 

EURAUD has been a bit of a messy setup recently and I still somewhat think this is a pretty volatile pair at the moment, but there is, nevertheless, a good opportunity to trade a reversal on this one, albeit on the 12H charts.

 

After a good-sized uptrend, we can see RSI divergence and a ranging phase that features a double top at a good resistance level. The price has since moved down again and is now testing an established local support area.

 

The price has been spiking through this area before so we take some buffer and if a 12H candlestick manages to close below 1.57, we can take a short position.

 

 

 

GBPUSD D long

 

Another one from the last watchlist is GBPUSD on the daily chart. We were hoping for a break of the 1.33 level and it didn’t yet happen last week. However, the price closed on Friday with a very nice bullish pin bar! I don’t trade pin bars on their own since they’re not as reliable as people want you to believe, but when they happen in the right place, they can give you some extra confluence.

 

This is the right place. It signifies that for a potentially last time, there was a push to liquidity in order for the big buyers to stock up buys at the demand zone. In other words, a pattern like this might mean that we will see strong bullish momentum next week. Of course, we never know, so we just wait and just respond to what the market gives us!

 

 

 

USDCHF 1H short

 

USDCHF on the 1H charts has a lot of good things: nice trend, spike into the highs which faked out the previous highs of last May and now bearish momentum down. Especially that fake-out is a very good sign, as it is often a good catalyst for a reversal and new trend.

 

However, I don’t want to just blindly jump in. The best way to approach this setup is to wait for a reversal to the 1.003 area and then mark the 1.0015 level (or a new low created by recent price action) as the local support that needs to be broken. In other words: there is a pre-condition to enter this trade! I’ll make sure to update the #announcements group chat as the price evolves.

 

 

 

USDJPY 1H short

 

A similar story can be found on USDJPY. A very nice rounded reversal already happened. It wasn’t a super strong resistance level, though. When rounded tops happen at less strong levels, it is often a retracement pattern and actually serves as a continuation pattern for the existing trend.

 

So again, we want to wait for more confirmation. First, we want to see the price retrace back to maybe the 112.5 area and once this happens, we can set our alerts at 112.3 or whatever the low has become due to recent price action. But for now, we wait!

 

 

 

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Felix

I'm a full-time, independent forex trader. I've been trading for over 10 years and specialize in price action trading, reversal trading, trading psychology and algorithmic trading. If you're determined to become a pro trader, I offer a select pro trading program. When I'm not trading, I'll either be travelling the world or rock climbing (likely both). Read my story here.