Hi traders, what’s up! 👋 After a semi-holiday week in Kyoto, ⛩ I’m back in Tokyo and ready to rock the charts again! 🔥
This week, the Trade Advisor students have received 16 (!) setups and some of them are real beauties! Many of them are on the 4H charts, but there are trading opportunities on the 1H and daily as well, so there’s something for everyone!
In order to show how the Trade Advisor students and I trade, I wanted to share a few of those setups. Feel free to use these reversal setups as inspiration on what to trade next week 😊 But enough talk, let’s get started!
The upcoming week
Let’s go over the most important economic news events for the upcoming week. As you might know, I’m a technical trader and don’t trade fundamentals. Regardless of this, it’s important to at least be aware of the major fundamental events and themes for the upcoming week, so you enter the markets prepared. Here’s an overview:
Monday starts with a bank holiday in the UK. Other than that, we see a few US FOMC speeches but that’s about it. Tuesday is a bit busier with Aussie retail sales numbers, Swiss unemployment data and USD JOLTs Job Openings data.
We can take a breather on Wednesday but we should keep in mind the US PPI data. Thursday is the busiest day of the week with New Zealand RBNZ interest rate decision and press conference, GBP BoE Inflation report and interest rate decision and USD CPI data.
Finally, we get some Canadian employment data on Friday to close the week. Here is the overview of next week:
Summary Of Setups
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, usually when a candle on the specified timeframe can close beyond the indicated level. Please read the explanation of each setup carefully.
Out of the 16 setups that the Trade Advisor members received, I’ve selected 5 reversal setups. Let’s have a look:
- AUDCAD 1H short
- EURUSD 4H long
- GBPUSD 4H long
- NZDCAD 4H long
- USDCAD 4H short
AUDCAD 1H short
Let’s start with AUDCAD! On this pair, we can see a (down-)trend continuation play on the daily. This means that on the 1H timeframes, we have a potential short opportunity. The price has rallied nicely and has since then moved into a ranging phase. There is RSI divergence and lower highs but no lower lows yet. For this, I’m waiting for a break of the 0.967 level.
Since this is a 1H setup, be careful to trade this too early in the week as we often see some “price discovery” in early Monday morning trading. Often, these moves don’t continue and it’s sometimes better to wait and see what London trading brings.
EURUSD 4H long
It’s been a while since EURUSD has made it onto our watchlist but this is too good to pass on to. On the 4H, we can see a beautiful trend and the price is also at an interesting support level. We can see that the price has tried to pierce through this level but most of the times, the price bounced back up.
This is a sign of bullishness so while we don’t want to enter too early, this looks interesting. There’s a nice little support-turned-resistance level at around the 1.2 round number, so that’s what we’re watching for next week. A decent momentum break to the upside across this price would confirm a long for me.
GBPUSD 4H long
Even though the trend isn’t as nice as with EURUSD, we can also see the potential for GBPUSD on the 4H charts. The price is slowing down after a nice downtrend and we also saw the spike into the lows. Again, there’s a support-turned-resistance level that we want to see broken, I’m watching the 1.36 price level for this.
Also, have a look at the daily and check if you can draw an ascending trend line that connects the lows of the trend swings. Isn’t that nice confluence on this setup?
NZDCAD 4H long
NZDCAD is a bit more volatile but essentially, it’s showing nice price behaviour as well. After the downtrend, we can see a break and retest pattern: first, a break of support at 0.906, which then turns into resistance.
If the price can move above that 0.906 level, it would confirm a higher high and likely also a higher low. This is exactly what we’re looking for in a bullish reversal like this and it would be a good opportunity to go long on this pair.
USDCAD 4H short
Another setup that keeps ranging! USDCAD has seen a strong uptrend and is now in a range for the past couple of weeks. The upside is seeing a bit more rejection than the downside, which still makes me interested in a bearish reversal on this pair.
The local support level is pretty clear: we want a good break and close of the 1.282 price point in order to short this. The nice thing about this setup is that the price almost didn’t create any structure on the rally up: there is likely not that much liquidity between 1.267 and 1.282. That means that if this pair breaks the 1.282 level, we might see a fast drop towards the 1.267 level.
I hope that these setups can help by giving you a bit of insight into how I trade and what I look for. Additionally, they might give you some inspiration on what to trade in the upcoming week.
If you want to know more about reversal trading and these setups, such as how to find them, how to manage your trades using a rules-based approach and even using an expert advisor to manage your trades, feel free to have a look at my Trade Advisor program. There’s a 20% discount if you sign up today and you get a one-week FREE trial!
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