FX Trading Ideas for the Week | Feb 17 - Feb 21, 2020

By Aiza Belle | 18 February 2020 | | Share:

Be fearful when others are greedy, and be greedy when others are fearful.

Although new cases of corona virus have decreased in rate, confirmed old cases increased thanks to Hubei province adding CT scan in detecting the virus early. The reality of under-reported cases didn't help increase -- or rather, reverse -- market's risk appetite, and spread fears that things are much worse than it seems.

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)

Technicals are still in-favor of AUD rallying soon, especially after S&P Global Ratings retains its AAA status despite covid-19 affecting Australia's short to mid-term growth. However in the long-run, still bearish on the Aussie especially with its dovish RBA and its minutes of meetings released earlier hinting of more easing soon.

AUDCAD - Buy at 0.885-0.89
AUDCHF - Wait for bearish continuation after rally near 0.665-0.67
AUDJPY - Wait for rally near 74-75
AUDNZD - Continue buying up to 1.06-1.07
AUDUSD - Wait for confirmation of bullish reversal first then buy near 0.67
EURAUD - Wait for direction confirmation near 1.60
GBPAUD - Wait for confirmed bearish reversal at 1.91

CAD - Wait

Despite oil's recent rally, expecting it to continue its bearish trend in Q1 along with CAD, especially after several airlines cancelled flights to China until spring time. However it's best to wait for better entry after possible rally, with forecast figures higher than previous ones in manufacturing and retail sales, including Canada's CPI (except if actual numbers are way lower than expected).

CADCHF - Wait for confirmed bearish continuation near 0.74-0.75 then sell
CADJPY - Wait near 83
EURCAD - Ride bearish continuation possibly up to 1.40-1.42 or wait
GBPCAD - Wait for recovery near 1.74 or head-and-shoulders pattern and bearish continuation past 1.71 then sell
NZDCAD - Wait near 0.85
USDCAD - Wait for bearish continuation near 1.325 before selling up to 1.315-1.318
AUDCAD - Buy at 0.885-0.89

CHF - Buy

With no change in current risk-off market sentiment which favors safe haven assets and currencies like CHF and JPY, still bullish on CHF. But be careful with upcoming industrial report on Friday, as well as possible impending manipulation  intervention by the SNB.

CHFJPY - Wait near 112
EURCHF - Wait for either short-term rally to 1.08 or bearish continuation past 1.06 then sell up to 1.032
GBPCHF - Sell up to 1.25
NZDCHF - Wait near 0.63
USDCHF - Wait for reversal confirmation near 0.985 then counter-trend sell
AUDCHF - Wait for bearish continuation after rally near 0.665-0.67
CADCHF - Wait for confirmed bearish continuation near 0.74-0.75 then sell

EUR - Buy (short-term)

Recent German ZEW survey showed worsening confidence on Euro zone (mostly affected by the disappointing industrial production numbers last December) despite better than expected trade balance last Friday and trade advantage post-Brexit. Since both technicals and sentiment are heavily biased on the up side, highly probable for EUR pairs to recover soon, but need to be careful of the whales notoriously doing their stop hunts right now, as well as the overall bearish mid-term outlook. Best to wait for confirmation of any rally first.

EURGBP - Counter-trend buy from 0.83 up to 0.848-.085
EURJPY - Wait for consolidation near 118.5 before counter-trend buying
EURNZD - Wait near 1.69
EURUSD - Wait for direction confirmation near 1.08 then either counter-trend buy up to 1.11 or continue selling up to 1.06
EURAUD - Wait for direction confirmation near 1.60
EURCAD - Ride bearish continuation possibly up to 1.40-1.42 or wait
EURCHF - Wait for either short-term rally to 1.08 or bearish continuation past 1.06 then sell up to 1.032

GBP - Sell

GBP recently enjoyed a rally post-Brexit after better than expected figures in GDP and unemployment. But with a dovish BOE, disappointing wage growth figure awhile ago, and "rumored" plans of Scotland to separate from UK and join EU, still bearish on GBP in the long run, unless both EU and UK manage to have a better deal than what they currently have now after Brexit and Scotland remains under UK.

GBPJPY - Wait for possible rally to 143-145 then counter-trend sell
GBPNZD - Wait for possible rally near 2.05 then counter-trend sell
GBPUSD - Wait near 1.30
EURGBP - Counter-trend buy from 0.83 up to 0.848-.085
GBPAUD - Wait for confirmed bearish reversal at 1.91
GBPCAD - Wait for recovery near 1.74 or head-and-shoulders pattern and bearish continuation past 1.71 then sell
GBPCHF - Sell up to 1.25

NZD - Wait

Mixed outlook for the Kiwi right now, but if most AUD pairs rebound soon, expecting NZD to rise as well especially considering how underrated it is with New Zealand having even better economic figures and outlook than Australia.

NZDJPY - Wait near 70
NZDUSD - Wait near 0.64
AUDNZD - Continue buying up to 1.06-1.07
EURNZD - Wait near 1.69
GBPNZD - Wait for possible rally near 2.05 then counter-trend sell
NZDCAD - Wait near 0.85
NZDCHF - Wait near 0.63

JPY - Wait

Despite being a safe haven currency like CHF, JPY is being pulled down lately by worse than expected GDP number yesterday, which also might prompt the dovish BoJ to provide more stimulus soon.

USDJPY - Wait for direction confirmation near 110
AUDJPY - Wait for rally near 74-75
CADJPY - Wait near 83
CHFJPY - Wait near 112
EURJPY - Wait for consolidation near 118.5 before counter-trend buying
GBPJPY - Wait for possible rally to 143-145 then counter-trend sell
NZDJPY - Wait near 70

USD - Sell (counter-trend)

Despite DXY enjoying a resumption of its long-term bullish trend recently especially with promised increased stimulus both from the government and the Fed already priced in by now (and helped elevate US equities too, but diverged with falling bond yields), as well as very bearish EUR, it's still possible for the dollar to consolidate soon once the impact of corona virus becomes more prominent in companies' bottomline, possibly even affect the US-China phase 1 deal, and dampens production and growth overall. 

AUDUSD - Wait for confirmation of bullish reversal first then buy near 0.67
EURUSD - Wait for direction confirmation near 1.08 then either counter-trend buy up to 1.11 or continue selling up to 1.06
GBPUSD - Wait near 1.30
NZDUSD - Wait near 0.64
USDCAD - Wait for bearish continuation near 1.325 before selling up to 1.315-1.318
USDCHF - Wait for reversal confirmation near 0.985 then counter-trend sell
USDJPY - Wait for direction confirmation near 110
XAUUSD - Wait for confirmed short-term bearish reversal at 1585-1590 before selling up to 1515
XAGUSD - Wait near 17.5
XTIUSD - Buy near 49-50 and ride up to 53.5-55.5
USDZAR - Wait for confirmed bearish reversal at 15-15.5 up to 14-14.33
USDMXN - Wait for possible rally to 19 
USDCNH - Wait near 7-7.05

II. Latest Monthly Positions

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Oil

USDCAD