Trade setups awaiting Trump’s tax reform policies

Next week’s open is expected to be rather dry while the markets await Trump’s “BIG TAX REFORM AND TAX REDUCTION” plans.

Recall back when Trump was still a candidate, he pledged to change the “complex, loop-holed ridden” tax system within 100-days of his presidency. Well, his 100 days are coming up next week and so is his expected tax reform plans.

This plan proposes large tax cuts for middle-class and businesses, a reduction of tax brackets from seven to three, simplified tax forms, and offshore profits repatriation. According to ForexLive, the market doesn’t believe Trump will be able to release an actual plan, more like a few broad principles and maybe, just maybe, some guidelines. This is can be observed in last week’s bearish U.S. Dollar’s stance.

Here are this week’s trading setups I’m monitoring:

Unfortunately, I was a bit late to the scene as this gap up on market open already happened. Keep in mind that you are seeing filled candles because Oanda doesn’t show gaps, but rather continuous candles. Regardless, it is a gap up as can be observed by the large candle movement and tiny tick volume.

EURUSD 30-Minute

However, on the lower time frame, this pair is quickly filling up the gap. The 1.078~ zone marks potential long entries as we test out the origin of fresh demand breaking past the previous highs formed sometime on April 20th. Currently, I remain bullish, but this pair is still yet to monitor.

AUDUSD 1-Hour

I originally entered in a long position near the end of last week, but got stopped out due to placing my stop loss inside the 0.752~ zone. It looks like this pair also took off on market open gapping up and now retracing to fill it. Despite that, I believe there will be another long entry opportunity as it retests the origin of the rally back in the 0.752~ zone.  Currently have an alert places at the upper boundary of this zone and continuing to monitor.

GBPUSD 1-Day

After months of consolidation, this pair experienced an upwards breakout of the daily wedge. I expect this pair to retrace back to the original break-out zone this week before giving any signs of further continuation.

EURUSD 4-Hour

Unfortunately, I was a bit late to the scene as this gap up on market open already happened. Keep in mind that you are seeing filled candles because Oanda doesn’t show gaps, but rather continuous candles. Regardless, it is a gap up as can be observed by the large candle movement and tiny tick volume.

EURUSD 30-Minute

However, on the lower time frame, this pair is quickly filling up the gap. The 1.078~ zone marks potential long entries as we test out the origin of fresh demand breaking past the previous highs formed sometime on April 20th. Currently, I remain bullish, but this pair is still yet to monitor.

AUDUSD 1-Hour

I originally entered in a long position near the end of last week, but got stopped out due to placing my stop loss inside the 0.752~ zone. It looks like this pair also took off on market open gapping up and now retracing to fill it. Despite that, I believe there will be another long entry opportunity as it retests the origin of the rally back in the 0.752~ zone.  Currently have an alert places at the upper boundary of this zone and continuing to monitor.

GBPUSD 1-Day

After months of consolidation, this pair experienced an upwards breakout of the daily wedge. I expect this pair to retrace back to the original break-out zone this week before giving any signs of further continuation.

GBPUSD 30-Minute

Over on the 30-minute time-frame, we can see this pair is currently trading in the range established about days ago. Additionally, Sunday’s open marks the daily high at the moment and this pair has also filled the gap with expectations of another upside to come.

USDJPY 4-Hour

In all other major pairs covered, the U.S. Dollar was considered the relatively weaker currency. However, this is an exception against the Japanese Yen. The U.S. Dollar in this case gapped up. While the overall view is a pre-dominant down-trend, this is a first indication of a reversal. There’s really not much to this setup. It’s just a matter of waiting for a retracement into the 109.4~ zone as the projected price pattern indicates.

Currently, these are the pairs I’m monitoring. Especially with the USDJPY, I’m aiming to get in on a long entry closer to the New York session.

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