We have an interesting week ahead of us in the FX markets.
Risk sits above key levels in some of the major pairs, a strong bounce could put us back higher a collapse of these support levels could push us lower quicker.
Quiet day on the economic calendar on Monday but the week is packed with a few key central bank decisions, followed up by US and Canadian Trade Balance and Chinese CPI.
Because of this we focus primarily on the technicals at the start of this week with us anticipating some key price action early on. We carry the following into this week:
- AUD/NZD short from last week, now in the profit having dropped and tested our T2 mark. Stops moved to lock in profit on this trade, we hope to let it run further south
- EUR/NOK short from Sunday, now well in the money having blasted past our T3 mark, we are now trailing stops on this to see how far it can go
- GBP/JPY long from Tuesday, booked some profit on this trade and have moved stops up to lock in profit, we are now trailing the remaining position
- GBP/USD short from Thursday, pair currently sits above our T2 mark, we look to book some profit at or around this point, we have moved stops to Breakeven and will trail this position
We really are at a key level in the euro, if you closed the position from last week on the test of the 200-day moving average well done. If we break and hold below the 200-day we can look for sell opportunities, if this continues to hold well we could see a bounce, initial test will be our recent lower high. Monday is key for this pair.
GBP/USD
The pound pushed to our T2 mark last week, we continue to hold this short, looking for a test of the 1.59 mark and recent lows/strong support. If this level breaks we would then expect to see a test of the 200-day moving average. We protect our position by moving stops lower.
AUD/USD
The aussie pushed lower after testing upper resistance; we were unfortunate to get stopped out as our order just got filled if you are still in this trade (you did better than us), we continue to like a test of the channel low.
USD/JPY
USD/JPY continued to push higher, we highlighted we liked this for a test of the 200-day moving average before pushing higher again. We continue to trail stops higher using retracements to add to our long position whils the 200-day moving average holds.