FX Trading Ideas for the Week | Aug 19 - Aug 23, 2019

By Aiza Belle | 20 August 2019 | | Share:

Markets continue to dance the cha-cha.

Trump suddenly delayed his planned September tariff for some products like cellphones to mid-December instead.

DXY and SP500 both bounced up from last week's low afterwards. But it's still too early to say that the "rumored" upcoming recession has fully turned around from whatever corner it's lurking at, especially with the 2-year-and-10-year bond yields' recent inversion still triggering the panic button of most investors.




The 3-month-T-Bill-and-10-year bond inversion that started last May this year, on the other hand, still persists as of this day-- which experts consider as a more reliable indicator of an upcoming recession.

If the US Economy is very strong indeed with US employment remaining high, then our Macroeconomics 101 tells us that the Fed's monetary policy can afford being less accommodating by being hawkish and hiking up rates instead. Him pushing a 100 b.p. cut along with rising US debt and aggressive trade "talk" is like putting a nail in the coffin, and may counter-intuitively trigger more global inflation.

Anyway, I don't have any interest in US politics, or any other kind of politics whatsoever. I'm just here either side it goes for the pips. (Though I would love USD to stay the same or continue slowly appreciating against PHP because like most OFW's who earn in dollars, I like my USD to get more pesos, and also I like products from China to continue being cheap :P)

Does China actually have the upperhand here now? China wants to renegotiate and want all tariffs totally removed though instead of just delaying for US shoppers.

Putin and the Arab princes might be laughing too: at least the oil price hike they want won't be blamed anymore on them this time if inflation gets worse. 

Before you proceed, make sure to read and understand this Disclaimer here and TRADE AT YOUR OWN RISK.

I. FX Trading Ideas for the Week

AUD - Buy (short-term)

AUD pairs finally started recovering at the start of this week from being oversold. Most attribute that bullish momentum to last week's positive news about its Wage Price, Employment and Business Confidence, with rumors too that its housing market like its charts have finally bottomed and bound to bounce soon. But based on market's muted reaction on those economic news last week, I think the main driver of its rally now is the new developments in the US-China trade talk mentioned above.

AUDCAD - Wait for confirmed reversal between 0.905-0.91 before selling
AUDCHF - Buy until 0.675
AUDJPY - Buy until 74
AUDNZD - Wait for retracement at 1.05 or lower before buying up to 1.07 
AUDUSD - Wait for confirmed bullish direction near 0.68 
EURAUD - Continue selling up to 1.60
GBPAUD - Wait for confirmed direction near 1.79

AUDUSD Long

CAD - Buy

Based on technical indicators and oil fundamentals mentioned above, plus US oil drillers cutting more rigs lately, it's highly probable that oil will rise to 66.5 within the year, and CAD pairs also recovering soon.

CADCHF - Wait near 0.735
CADJPY - Wait for confirmed bullish reversal near 79 before buying
EURCAD - Wait near 1.475
GBPCAD - Wait near 1.615
NZDCAD - Wait for confirmed  direction near 0.85
USDCAD - Wait to rally near 1.34 then sell again
AUDCAD - Wait for confirmed reversal between 0.905-0.91 before selling

USDCAD Short

CHF - Wait

Unlike other currencies at the start of this week, CHF still remains in limbo and it's highly probable that either CHF pairs will continue going sideways or just ride the other currencies' momentum.

CHFJPY - Wait for confirmed bounce up from 107.6 before buying
EURCHF - Wait for confirmed bounce up near 1.085 before buying
GBPCHF - Ride or wait for retracement near 1.20 before selling again
NZDCHF - Wait near 0.63
USDCHF - Ride possible retracement up to 0.99
AUDCHF - Buy until 0.675
CADCHF - Wait near 0.735

EUR - counter-trend Sell (short-term)

Still bullish overall for EUR but similar to last week, ride possible retracements for some overbought EUR pairs, especially with Italian politics coming into play again and rumored recession fears spreading to Germany as well.

EURGBP - Wait for confirmed bearish continuation at or past 0.91 then sell again
EURJPY - Wait for bounce up from 115-116 then buy 
EURNZD - Wait for confirmed bearish continuation at or past 1.72 then sell again
EURUSD - Wait for confirmed bullish reversal near 1.10 then buy 
EURAUD - Continue selling up to 1.60
EURCAD - Wait near 1.475
EURCHF - Wait for confirmed bounce up near 1.085 before buying

GBP - counter-trend Buy (short-term)

Still almost same idea as the other week: ride short-term buying opportunities or wait for better prices and start selling again because as mentioned here, I continue to be bearish overall in GBP despite most of its pairs looking oversold already.

GBPJPY - Wait for retracement near 128 then buy again
GBPNZD - Sell and ride retracement until 1.85 then buy again
GBPUSD - Wait for confirmed reversal around 1.20 or lower before buying
EURGBP - Wait for confirmed bearish continuation at or past 0.91 then sell again
GBPAUD - Wait for confirmed direction near 1.79
GBPCAD - Wait near 1.615
GBPCHF - Ride or wait for retracement near 1.20 before selling again

GBPJPY Possible Reversal

GBPCAD Hedge

NZD - Wait

Kiwi might start recovering in the 2nd half of August like the Aussie, however unlike the latter, the Kiwi's relatively strong macroeconomic fundamentals continue to be overlooked and the markets continue to highlight RBNZ's recent sudden rate cut and effects of US-China trade talk, so we'll see.

NZDJPY - Wait for confirmed direction near 68
NZDUSD - Wait for confirmed direction near 0.64
AUDNZD - Wait for retracement at 1.05 or lower before buying up to 1.07 
EURNZD - Wait for confirmed bearish continuation at or past 1.72 then sell again
GBPNZD - Sell and ride retracement until 1.85 then buy again
NZDCAD - Wait for confirmed  direction near 0.85
NZDCHF - Wait near 0.63

JPY - counter-trend Sell (short-term)

Still same idea as last week, get ready for any possible reversals from JPY being overbought.

USDJPY - Wait for confirmed bullish reversal near 104-105 before buying
AUDJPY - Buy until 74
CADJPY - Wait for confirmed bullish reversal near 79 before buying
CHFJPY - Wait for confirmed bounce up from 1.076 before buying
EURJPY - Wait for bounce up from 115-116 then buy 
GBPJPY - Wait for retracement near 128 then buy again
NZDJPY - Wait for confirmed direction near 68

USD - counter-trend Sell

DXY manages to continue testing its 98 resistance after Trump's tweets mentioned above, however the rumored 2 more rate cuts this year will continue to be priced in by the markets and somehow bring USD down in the short-run (before counter-intuitively pumping DXY most likely to 100 level upon next rate cut by Powell). After that, fundamentals might trump against Trump himself with looming recession most likely making DXY bounce down sharply from 100 unless US-China trade talks improve and US consumers continue to afford shopping as usual.

AUDUSD - Wait for confirmed direction near 0.68
EURUSD - Wait for confirmed bullish reversal near 1.10 then buy 
GBPUSD - Wait for confirmed reversal around 1.20 or lower before buying
NZDUSD - Wait for confirmed direction near 0.64
USDCAD - Wait to rally near 1.34 then sell again
USDCHF - Ride possible retracement up to 0.99
USDJPY - Wait for confirmed bullish reversal near 104-105 before buying
XAUUSD - Wait for consolidation near 1480 or lower then buy again
XAGUSD - Wait for consolidation near 16.5 or lower then buy again
XTIUSD - Wait near 55
USDZAR - Counter-trend sell near 15.5
USDMXN - Counter-trend sell near 20

Feature image by Jordan A. of Pixabay