Major pairs are expected to remain relatively quiet for the week ahead as we observe some range plays and consolidations.
EURUSD recently tested the breakout of an hourly range, but appears to fall back within range. Currently, I do not plan on taking any range trades since the boundaries represent approximately a 50 pip movement. I would prefer to trade a breakout provided that it provides a much stronger move.
From a monthly outlook perspective, I hold a bearish stance on this pair for the months of March and even maybe April. After reaching 2015 highs, I would expect this pair to take a breather as long side take profit could settle in. We have begun seeing this in early 2016, but there is more downside before I would consider entering long.
Currently, pairs AUDUSD, GBPUSD, and USDJPY look bleak to me. The daily dojis and near daily dojis signal a lot of indecision to me, which is not worth trading at the moment.
My other position is currently in USDCAD, which I held since last week.
While USDCAD briefly broke below the daily level at 1.2661~, it held supported on the dashed line marking an hourly resistance turned support level. Seeing how that level held up, my current position, at a slight loss, will remain open for the time being. I have mentioned before that the recent job loss figure will put a damper on inflation and economists are a bit optimistic of the Canadian economy’s growth. I still maintain a long position here, essentially shorting the Canadian dollar.
The final pair I’m interested in getting a trade in is the EURJPY. Seeing as it currently is held supported at a daily level of 131.17~, I believe it offers quite a nice reward to risk ratio. If I used Tradingview’s measurement tool right, the upside potential is about 270 pips until we reach the next major level serving as a potential resistance. It is currently just after the New York’s close so I will wait a bit longer for Oanda’s spreads to normalize before I consider entering long into this trade.
Fundamentally, there isn’t any major news being released affecting the Japanese yen. The Bank of Japan is also not expected to make any significant announcements either.
I will be making a later post detailing my transition of my broker. Stay tuned for that shortly!