FOREX

Lots of Forex Pairs Setting Up For Next Week, Here's What to Watch – TheStreet


Heading into the weekend, we may have some trades trigger but more than likely most will happen next week. When holding trades through the weekend, read this article.

I have no positions heading into the weekend, all discussed trades have been closed. The AUDNZD and EURJPY, which I wasn’t in were the only two discussed trades that may have remained open for some people. After nice initial movement, they have pulled back to near the entry area. If not already trailed out, those can be closed for a small profit or breakeven. 

Let’s look at what to watch next week, possibly today. 

I have grouped the trades based on their price structures, so some of these trades will be quite similar. I have posted the correlation matrix at the end of the article.

Other Majors Bouncing Against USD

The EURUSD and GBPUSD both bounced off ranging support on May 7.  Next week I will be watching the hourly to see if we get a buy or sell indication. With the recent jump, it looks more likely to be a buy, but we shall see. Watch the price action video for details on what to look for.

USDCHF is the same structure but flipped upside down. It hit and fell off resistance.

USDJPY is in a falling wedge on the hourly chart. Will be watching to see how it acts near the top of that wedge for a potential short.

AUDCAD and AUDNZD

AUDCAD was discussed in detail on May 7. AUDNZD had a recent trade discussed here.

Both pairs are in uptrends but approaching key areas which may cause reversals. Price action needs to confirm either a break through the key area or a reversal.

AUDCAD has stalled out near the key level (shown below). AUDNZD buyers are also acting hesitantly.

GBPJPY, GBPCAD, GBPNZD Near Bottom of Structures

All these pairs are near the bottom of short-term or longer-term structures. 

GBPJPY is near the bottom of a range which started in April. It broke below yesterday but then moved back to the breakout point. This one could go either way and may provide a breakout of the current consolidation soon.

*Broke that consolidation higher while writing. Long at 132. Likely more entries will occur in early trading next week. So did a number of other USD and GBP pairs mentioned.

GBPCAD has a similar setup, near the bottom of a month-long range. This range occurs below a major resistance level on the longer-term charts. That can also be monitored for longer-term trade opportunities.

GBPNZD is in a descending channel since April, but has recently intersected within a longer-term rising trendline. So it too may rally or break lower. 

EURCAD and EURNZD

Pretty similar setups here. Near the bottom of expanding ranges. Recently had a big short trade in this pair in the EURCAD. 

These expanding ranges are getting pretty mature. While I always wait for price action to confirm direction, over the longer-term this overall pattern tends to result in a move lower (the direction that preceded the expanding range). Don’t know when that will occur though, so I will take signals as they come, even if it is a long (but will trail the stop loss a bit more aggressively on the long going forward.

CHFJPY

This pair is bouncing off a descending channel bottom, which is also near a major long-term support level on the daily chart. Awaiting a pullback that confirms bullishness (higher low, selling tapers off, consolidation break to the upside) to get long.

USDMXN

This pair is near the bottom of a triangle, two of them. A big one and a small one. 
Currently dropping but the forex market is notorious for false breakouts. So no shorts until I see a strong down move out of the triangles. Then a pullback could be shorted if the pullback shows signs of bearishness. 

A move up from here could set up a long trade. To be conservative, I’d use the top of the small triangle as a profit target. This means dropping down a couple of time frames to make sure the reward:risk is worthwhile. If another long trade sets up near the top of the small triangle, then the upper triangle trendline could be used as a target. The top of the small triangle may also present a shorting opportunity.

Correlation Matrix

Be aware of the correlations if taking trades in multiple pairs.

CorrelationsMataf.net

Price Structures

All the above potential trades are based on price structures. Here’s more information on how to trade them.

By Cory Mitchell, CMT. Join me on Twitter @corymitc.

Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage.

Assume I have positions, all the time, in many pairs.

Trades are based on strategies and are not meant to be predictions. The number of trades won varies between 30% and 60% based on the strategy. My objective is to make money based on solid reward:risk ratios, not try to predict every move of the market.

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