FX Trading Ideas for the Week: October 26-30, 2020

By Aiza Belle | 27 October 2020 | | Share:

A quiet week as pre-Halloween jitters and risk-off sentiment prevail. Updated last 11/2/2020: Added comments regarding how prices actually moved last week.

Average daily new confirmed cases of the virus both in the US and Czech Republic are recently at an all time high now after easing restrictions few months ago along with general attitude of complacency, that encouraged the coming of the second wave.

I've been considering taking a 2-week hiatus instead between now and during US National elections week to allow any possible upcoming crazy volatility to subside first, not to mention our internet service provider is having technical issues right before its IPO launch and official public trading yesterday (so we don't have internet for a week now -- save for the spotty mobile data I use, and same case with our neighbors using the same ISP).

But I'm greedy lol.

And unlike last summer, both fundamentals and technicals may finally align now and actually represent how prices move in reality. In theory, central banks can't always just print money without taking into consideration the repercussions, especially when there's no assurance that companies they try to help or include in stimulus deal won't suddenly file bankruptcy thanks to the second wave.

But in reality, can they (still)?

It's a tough balancing act. We'll see. 

Upcoming economic events between now and the US National Elections:

• US consumer confidence and sentiment, goods order, PMI, pending home sales and price index figures are all forecasted at conservative levels, while forecast on Q3 GDP and jobless claims are optimistic
• Australia's CPI tomorrow, and RBA rate sentiment expected to be the same by Wednesday (despite generally dovish RBA hinting bond buying and rate cut possibly by next month)
• Canada's GDP figures soon (set conservatively lower than previous period) followed by manufacturing PMI, but after BOC's interest rate decision tomorrow (which is expected to be 0.25% still and not go down the 0 to negative territory yet unlike RBA -- however BOC will continue its quantitative easing)
• BOJ is due to release its outlook report and monetary policy meeting minutes on Thursday and expected to remain neutral (possibly low-key hawkish since "neutral is the new hawkish" it seems like these days)
• ECB is expected to retain its refinancing rate at 0% but more easing is on its way, while Germany's preliminary quarterly GDP is due on Friday

Disclaimer: This is my own analysis and guide for the week for my own trades, and shouldn't be treated as financial advice. Do your own due diligence and see our Disclaimer policy here. Trade at your own risk. 

I'm pausing my EA, but may still trade manually. However, I'll try my best to avoid pairs with huge correlation to overall strength of US dollar now (keeping my distance particularly at USDZAR and USDMXN but who knows when I'll suddenly get "seduced" by them again lol) except for short-term daily trades with GBPUSD. Need to gauge the whales overall sentiment, and patiently wait for the next wave in gold and S&P 500.

Overall I'm still bearish on oil as well as on AUD and EUR pairs, but must wait for better entry point first; while bullish on GBP pairs and waiting for the next wave on gold. As mentioned earlier, will avoid taking risky positions in USD pairs and will wait for confirmed direction or trend first after elections (or even a week after that) before jumping in.

Comments in this color were added on 11/2/2020.

AUDCAD - Wait near 0.94 | started consolidating from 0.94 towards 0.93

AUDCHF - Wait for rally near near 0.65 or bearish continuation before selling | rallied to 0.65 last Wednesday before dropping to 0.64, but showing signs of recovery again the next day

AUDJPY - Sell near 75 or wait for breakout past 73.944 before selling | price continued dropping especially last Wednesday and now consolidating at 73.5

AUDNZD - Wait near 1.065 | same with other AUD pairs above, also continued going bearish and dropped at 1.06 and only started rallying by Friday

AUDUSD - Wait for bearish continuation past 0.70 then sell | bounced from 0.715 down to 0.70 again but didn't breakout that level yet     

CADCHF - Ride or wait for rally to 0.695 or higher before selling | dropped right away from 0.69 towards 0.6817 last Wednesday before recovering back to 0.69 again

CADJPY - Wait near 76.5 | continued its bearish momentum past 78 before consolidating by Thursday

CHFJPY - Wait for better entry near 114 or lower then buy up to 117-118 | dropped at 114 by Friday

EURAUD - Wait near 1.669 | continued consolidating between 1.645-1.668

EURCAD - Wait near 1.56 | climbed up to 1.56655 only to reverse and continue its downward trend by Thursday

EURCHF - Wait near 1.07 | continued dropping towards 1.067 before forming an inverse hammer candle by Friday

EURGBP - Wait for better entry near 0.915 or breakout at 0.90 before selling | dropped right away from 0.91 to 0.899 by Friday but started rallying again today

EURJPY - Wait near 124 | dropped from 124.2 to 121.735

EURNZD - Wait near 1.768 | continued consolidating between 1.755-1.777

EURUSD - Wait for bearish confirmation or better entry near 1.19 before selling | dropped from 1.1856 down to 1.165

GBPAUD - Wait near 1.82850 | consolidated between 1.82-1.85

GBPCAD - Wait near 1.71 | dropped from 1.72 down to 1.715 by Friday

GBPCHF - Wait near 1.186 | continued consolidating between 1.1755-1.189

GBPJPY - Wait near 136.5 | dropped from around 136.5 down to 134.5

GBPNZD - Wait near 1.95 | consolidated between 1.94-1.961

GBPUSD - Wait for better entry at 1.29 or lower before buying | dropped past 1.29 by Thursday and rallied a bit by Friday, however went down again today

NZDCAD - Wait near 0.87 | climbed towards 0.8865 (38.2 weekly fibonacci level) and then started bouncing and dropping to 0.88 by Friday

NZDCHF - Wait near 0.605 | continued consolidating at around 0.605, above 0.60475 (-38.2 weekly fibonacci level)

NZDJPY - Wait near 70 | dropped by Wednesday from 70 down to 69

NZDUSD - Wait near 0.665 | dropped by Wednesday from 0.671 to 0.6596

USDCAD - Wait for better entry near 1.30 before buying | only dropped up to 1.314 before continuing its climb towards 1.33665 by Thursday

USDCHF - Wait near 0.91 | continued going up to 0.917

USDJPY - Wait for confirmation first of possible bullish reversal near 104 before buying | dropped towards 104 and started climbing up by Thursday

XAUUSD - Wait for either price drop and better entry near 1860 - 1875 or bullish breakout from trendline at 1920 before buying | bounced from 1860 last Thursday and started rallying again by Friday

XAGUSD - Wait near 24.5 | formed an inverse hammer at around 23 last Thursday and rallied again by Friday

XTIUSD - Wait for possible rally near 40 or higher before selling | continued dropping from 39.6 before seemingly forming an inverse hammer nowat 34.9

USDZAR - Wait for either bearish breakout or bullish bounce at 16-16.10 | consolidated between 16-16.5

USDMXN - Wait for either bearish breakout or bullish bounce at 20 | bounced from 20 last Wednesday and moved up to 21.5

Oil, EUR and AUD remained bearish as expected, while USD recovered (whether that bullish bounce continues after elections or not remains to be seen. Meanwhile GBP and metals continued consolidating, and might be hinting a bullish breakout soon.

Feature photo by Drew H. of Unsplash