Trade setups for the week ahead – November 19, 2017

Current Events:

  • NAFTA talks run risks of stalemate as US negotiators remain inflexible – US demands half the content of North American built autos must come from the United States
  • Mexican pesos stands to lose more ground than the Canadian dollar as President Trump does favor a bilateral trade agreement with Canada
  • Canadian dollar further likely to remain relatively weaker as Canadian inflation slows down to 1.4% while the Bank of Canada has set a target rate of 2% – Bank of Canada less likely to raise rates for the rest of this year until employment picks up
  • Equities market ended off on weaker note as major tax reform less likely to pass any time soon, short term corporate profitability in question

EURUSD:

EURUSDDaily
EURUSD 1-Day

Over on the daily timeframe, price rallied and then stalled in the last three days. Further bullish momentum expected after breakout above the lower daily support turned resistance level at 1.1685~.

EURUSDH1
EURUSD 1-Hour

If price holds above this hourly support level at 1.176~, I would look for a potential long entry. If NAFTA negotiations continue to falter and tax reform fails to solidify, the US dollar is expected to trade overall weaker against the other major pairs. From a technical stand point, bearish sell-offs remain weaker indicated by shorter red bars failing to penetrate prior lows.

AUDUSD:

AUDUSDWeekly
AUDUSD 1-Week

I actually previously mentioned the bullish side of this pair as it broke above the shared daily and weekly level. Last week marks the first significant weekly break below this weekly level. Over the weeks ahead, we can expect this pair to make some major moves in this weekly range.

AUDUSDH4
AUDUSD 4-Hour

I will be eyeing this level on market open as price breaks below this support line and then retraces back to it. Next week’s market open could signal a potential a next wave selling opportunity.

USDJPY:

USDJPYH6
USDJPY 6-Hour

This pair remains a monitor for the time being since I still view this as a weak bearish trend right now. After testing the daily resistance multiple times and failure to make any significant push lower, I question the strength of the short positions. I actually took a short position on this pair last week, but it remains a monitor for the week ahead as it tests the 111.67~ price level.

NZDUSD:

NZDUSDDaily
NZDUSD 1-Day

NZDUSD also is threatening to break below the daily level. The week ahead will remain volatile for this pair as the US dollar is expected to remain relatively bearish as we await key meeting minutes and unemployment claims later in the week.

EURCAD:

EURCADDaily
EURCAD 1-Day

Over on the daily timeframe, this pair is currently holding supported at the daily level. If this level holds up after such a tremendous bull run after last week, we can expect further bullish pressure ahead. One concern is gauging the continuation of demand for the week ahead. As I’m writing about this pair, the market actually opened for 25 minutes already.

GBPJPY:

GBPJPYWeekly
GBPJPY 1-Week

First up on the weekly timeframe, this pair broke up above one weekly level a few weeks back and has been held resisted at a key support turned resistance point. While the US dollar is fundamentally weaker than the Japanese yen at the moment, the pound is expected to be relatively stronger in the weeks to come provided we see some more structure on this pair as it fails to sell off. I currently do not have any trade plans on this pair, but to simply monitor the price action at this point. More to come.

 

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