Forex Trading Ideas for the Week | May 11 - May 15, 2020
With markets being moved now by hype and FOMO, in desperate attempt to "offset" the stimulus package being given away to both consumers and businesses, if we're not being careful, another kind of second wave in the market is still a huge probability.
Markets now are "cautiously" optimistic about recovery -- health wise and economic wise, which is also being reflected by current price limbo,. figuring out which way things will go next. Majority are eager to resume business as usual, but being blind to this current systemic risk.
Before you proceed, make sure to read and understand this other Disclaimer here and TRADE AT YOUR OWN RISK.
I. FX Trading Ideas for the Week
AUD - Sell
Despite the recent recovery in AUD pairs lately -- mainly because Australia has been hit by the pandemic less compared to other places in the world as well as its planned decoupling with China, technical-wise AUD pairs are reaching their new ceiling soon and a consolidation is highly probable especially with its bearish seasonality for May, a slower economic recovery, and higher unemployment numbers later this week.
AUDCHF - Wait for bounce down from 0.65
AUDJPY - Wait for rally up to 70-71 before selling
AUDNZD - Wait for bullish breakout at 1.085 before buying
AUDUSD - Wait for direction confirmation near 0.65
EURAUD - Buy near 1.60-1.65
GBPAUD - Wait near 1.90
CAD - Wait
Similar to AUD above and even oil, expecting CAD to resume its weakness especially with institutional traders showing more bearish bias lately compared to the previous periods. Though fears of second wave is being priced in, it's best to wait for confirmation first.
CADCHF - Ride bounce down from 0.70
CADJPY - Wait near 75
EURCAD - Wait for direction confirmation near 1.52
GBPCAD - Wait near 1.73
NZDCAD - Wait near 0.85
USDCAD - Either wait for consolidation near 1.385 (or lower) or confirmed bullish breakout at 1.40-1.41 before buying
AUDCAD - Wait for possible bearish reversal near 0.92 then sell
CHF - Wait
Overall, most CHF pairs are ranging now and got less appealing with overbought gold, while both equities and bitcoin received renewed interest (albeit just short-term) from the markets. Best to gauge another currency's momentum and use strategies for riding this pairs ranging movement.
CHFJPY - Wait for direction confirmation near 110
EURCHF - Wait for direction confirmation near 1.05
GBPCHF - Wait for bullish continuation past 1.20, or better entry near 1.145 then buy
NZDCHF - Wait for bounce down from near 0.60 before selling
USDCHF - Wait near 0.97
AUDCHF - Wait for bounce down from 0.65
CADCHF - Ride bounce down from 0.70
EUR - Buy (short-term)
Despite a bearish mid to long-term outlook for euro pairs especially recovery will indeed take longer than what most people want (and anticipate), a short-term rebound is still possible before its bearish momentum resumes-- most likely once USD gains back its appeal as safe haven asset and get stronger especially if DXY breaks past 100, and manipulation in equities eases up (let's talk about it in another post later).
EURGBP - Wait near 0.87
EURJPY - Wait near 115
EURNZD - Wait for better entry at 1.77 or lower or breakout past 1.80 before buying
EURUSD - Wait for either a breakout down or short-term bounce up from 1.07
EURAUD - Buy near 1.60-1.65
EURCAD - Wait for direction confirmation near 1.52
EURCHF - Wait for direction confirmation near 1.05
GBP - Wait
There's a "rumor" going around that the mutated strain in New York, Euro zone and Singapore are more lethal than the one originally from China. With UK having the highest death toll now in Europe-- surpassing Italy's position (although to be fair to Brits, this may be the case and not necessarily because they're less resistant, similar to the logic of US widespread testing and integrity, so they're "highest" now-- which is debatable imho): |
| Numbers as of 5/12/2020 |
Confirmed cases aren't peaking yet either, and Brexit transition is more likely to be delayed and not push through by December, despite Boris Johnson's warning. Overall outlook for GBP is mixed in the short-term, and still bearish in the long-run, with a decrease in GDP, economy shrinking and current account deficit slowly being priced in by the markets.
GBPJPY - Wait near 132
GBPNZD - Wait for direction confirmation near 2.00
GBPUSD - Wait near 1.23
EURGBP - Wait near 0.87
GBPAUD - Wait near 1.90
GBPCAD - Wait near 1.73
GBPCHF - Wait for bullish continuation past 1.20, or better entry near 1.145 then buy
NZD - Sell
With a dovish RBNZ and possibility of them cutting its current 0.25% interest rate down to negative territory-- -0/75% -- by November.still being priced in by the markets, expecting the kiwi to continue its bearish momentum especially with a bearish bias as well in this month's seasonality.
NZDJPY - Sell from 65.5
NZDUSD - Wait near 0.60
AUDNZD - Wait for bullish breakout at 1.085 before buying
EURNZD - Wait for better entry at 1.77 or lower or breakout past 1.80 before buying
GBPNZD - Wait for direction confirmation near 2.00
NZDCAD - Wait near 0.85
NZDCHF - Wait for bounce down from near 0.60 before selling
JPY - Wait
Expecting JPY to resume its strength like the USD soon (since both are safe haven assets), especially with risks of a second wave still on the table. Best to wait for confirmation first though and gauge other currencies' weakness before selling JPY pairs (going bullish on JPY).
USDJPY - Wait near 107.5
AUDJPY - Wait for rally up to 70-71 before selling
CADJPY - Wait near 75
CHFJPY - Wait for direction confirmation near 110
EURJPY - Wait near 115
GBPJPY - Wait near 132
NZDJPY - Sell from 65.5
USD - Wait
With protesters in the US worsening the risk of a second wave-- which I agree to be more devastating than the one we have now, risk-off sentiment will resume soon and definitely bullish for USD soon.
AUDUSD - Wait for direction confirmation near 0.65
EURUSD - Wait for either a breakout down or short-term bounce up from 1.07
GBPUSD - Wait near 1.23
NZDUSD - Wait near 0.60
USDCAD - Either wait for consolidation near 1.385 (or lower) or confirmed bullish breakout at 1.40-1.41 before buying
USDCHF - Wait near 0.97
USDJPY - Wait near 107.5
XAUUSD - Wait for bullish continuation from 1705 (or lower) and buy up to 1790
XAGUSD - Wait near 15
XTIUSD - Wait near 25
USDZAR - Buy from 18.5 (or lower)
USDMXN - Wait for better entry near 23.5 or breakout past 24.5 before buying
USDCNH - Wait near 7-7.05
Feature photo by W.Lambert of Unsplash.
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