The 4 Best Trading Setups For Next Week

Happy Sunday everyone! After a solid month of trading in January and a capital-preserving February, I’m up +7.5R for the year (what is R?). March has just started and I have selected 4 setups that show the most promise for the upcoming week. I hope you find the info valuable 🙂

Note: This weekly outlook is one of the cornerstones of the Trade Advisor program. If you want to know more about how I trade, including weekly setups, a swing trading strategy and a day trading strategy, an EA and a private trading room, check out my learning to trade program.

But enough about that, let’s get started with a preview of the economic news that’s planned for next week!

The Upcoming Week

It’s not going to be a busy week. The week starts on Monday with US retail sales numbers. On Tuesday, we get some news from the UK: first, there’s manufacturing production data and then, the UK parliament will vote on the Brexit deal (once again!). We also get CPI data from the US.

The US news continues on Wednesday, with Core durable goods orders and PPI. Thursday is a low-news day and Friday closes the week with EU CPI and US JOLTs job openings. Here is the overview for next week:

Trading Setups

I’m looking for setups on the daily, 12H, 8H, 6H, 4H, 2H and 1H time frames. See my article on how to trade custom timeframes in MT4 if you can’t select all timeframes.

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

  • CADCHF 12H short
  • CHFJPY D long
  • GBPAUD 1H/2H short 1.858
  • GBPJPY 2H short 147.0

CADCHF 12H short

While not necessarily a pretty chart, I’ve learned to pay attention when the reversal pattern looks like this “table” structure with a flat top and consolidation. It doesn’t surprise me that we got a strong bearish Friday and I think more bearish momentum might follow.

The key is now to find the best entry point. Either it moves back up on Monday on a pullback or it moves a bit lower first and then retests the previous support at 0.752 as resistance from below. Either way, I’ll be waiting for a pullback. A 38.2% Fibonacci retracement from the current price would line up nicely with previous support.

Depending on how the pullback looks, we can determine how to trade this. We can either take the conservative approach and wait for short momentum and a close below the most recent lows or we can enter on the pullback, but only if we see signs of bearish momentum picking up again (e.g. an engulfing bar or similar).

A final target can be 0.735, although that might be ambitious to reach in one week. Some intermediate targets can be used as well for partial profit taking.

CHFJPY D long

I already indicated last week that this was an interesting trade to go long, as it had recently broken a pretty significant SR level at 111.0. Friday was bullish but still closed the week with somewhat of an upper wick so for this week, I would like to play the pullback scenario.

There’s a good chance that the price will move back down to retest the support at 111.0. If that happens and we see that the bullish trend resumes, there is still plenty of potential upside to take a long position on this pair.

On the other hand, if the price moves below this level and doesn’t move back up fast, my bias would turn bearish and I would likely stay out of this market.

GBPAUD 1H/2H short

GBPAUD on the 1H charts is at a major resistance level at 1.87 (see here). We could see the initial reaction last week with a sharp move lower, followed by… a sharp move higher.

While it doesn’t make for the prettiest charts, I like fake out moves like this. A lot of traders have probably already been trapped by this volatile price action and if the price still moves lower, it shows a serious conviction from the bears to sell off GBPAUD and it should, in theory, result in an easier trade.

But first, I want to see some confirmation. I’ll be waiting for a break of the 1.858 level and if the price can close below this on either the 1H or 2H charts, I’ll be happy to take a short. A potential target could be the demand area at 1.845.

GBPJPY 2H short

Slightly similar to GBPAUD is GBPJPY. While the resistance isn’t as strong, we’re still seeing the type of price action that could lead to a full size reversal.

We’ve had a very nice uptrend (nicest looking of this week, actually), the price hugged the SMA, we had RSI divergence, a spike into the highs and the moving average is flattening out. All good signs!

Now, it’s waiting for some more confirmation – we don’t want to call tops and bottoms! Technically, the price is still going up so for now, I’m simply in waiting mode – I want to see more bearish price action and my breakout support is at 147.0.

I would prefer a move lower into said support, then a bounce followed by a breakout and close below 147.0. If we see that, I might be interested in a short on this pair.

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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.