The Weekly Update: First Signals in 2017

January Strategies

2017 is likely to be an extraordinary year in the market as Article 50 (A50) is expected to be triggered. The brexit negotiations with the EU following the A50 activation are likely to inject some volatility into global markets. Most currencies will be affected as soon as A50 is triggered in the Forex market. We may witness greater volatility after President-elect Donald Trump will enter the White House. We will begin with the New Zealand Dollar (NZD) in our technical analysis.

NZDUSD Monthly Chart

Please click on the chart to enlarge:

The Weekly Update: First Signals in 2017

NZDUSD Monthly Chart 02/01/17

The recent weakness may have affirmed a right-hand shoulder of a reversed Head-And-Shoulders (H&S) reversal pattern. The shoulder is also supported by the 21 Moving Average (MA, in blue). The initial target based on the monthly chart is the neckline (upper diagonal line), however, it may take several months to be reached. We refrain from holding trades for long periods of time unless we note the potential for a significant reversal. We are likely to base the take profit on the weekly chart. We have also noted a similar entry in AUDUSD, however, there are 2 potential levels for the shoulder’s lows. It means that AUDUSD may very well dip lower before correcting higher. If Aussie Dollar continues to be heavily sold we may consider a long trade in the currency pair. It is difficult to determine what may trigger NZDUSD gains aside a weak US Dollar as this is a monthly entry. One of the possibilities is that the RBNZ may signal the markets it is less keen on loosening its monetary policy, which lift NZD against a basket of currencies. Our assumption is that it may very well be related to the People’s Bank of China (PBOC) future monetary policies that have the tendency to affect the commodity currencies.

GBP Outlook

We have analyzed all GBP pairs and crosses. There are early indications for a strong GBP, however, we were unable to locate an entry in all GBP pairs and crosses. We did notice a potential 4hr entry in EURGBP, however, this is a weak entry that we decided to dismiss. GBPCHF may also offer an entry, however, the required stop is approximately +300 pips due to the bearish spike, which we also dismissed. The only meaningful entry we discovered is in GBPCAD weekly chart. However, there is an element of risk in a long trade in the cross.

GBPCAD Weekly Chart

Please click on the chart to enlarge:

The Weekly Update: First Signals in 2017

GBPCAD Weekly Chart 02/01/17Ec

Since mid-December GBPCAD was locked inside a relatively tight range. The main concern when the price ranges over such period of time (seen in the daily chart) is a strong break lower or a strong bullish retracement. We prefer entries when there is a stronger possibility for a single direction, in GBPCAD it is mixed. The Canadian Dollar does not appear weak at the time of this writing so we must assume the strength may stem from GBP. Economic figures from the UK this week (as early as Tuesday) may be the initial drive for the retacement. We are still uncertain whether the trade should be taken due to the risk of a bearish breakout. We will determine how to proceed with the signals after 00:00 GMT.

We are aware some brokers may have already opened the market for trading, the majority of the brokers allow trading after 00:00 GMT.

NZDUSD Trade Alert

Please click on the chart to enlarge:

The Weekly Update: First Signals in 2017

NZDUSD Monthly Chart 03/01/17

NZDUSD long at market price (0.6933)
Take profit: 0.7240
Protective stop: 0.6800
Risk Ratio (RR): 1 : 3 (approx.)
Estimated duration: 21 days

EURGBP Trade Alert

Please click on the chart to enlarge:

The Weekly Update: First Signals in 2017

EURGBP 4hr Chart III 03/01/17

EURGBP short at market price (0.8486)
Take profit: 0.8410
Protective stop: 0.8516
Risk Ratio (RR): 1 : 3 (approx.)
Estimated duration: 72 hours

03/01/16 UPDATE: EURGBP is trading at 0.8500 at the time of this writing prior to the 4hr close. Although we implemented a very tight stop for the short trade, a 4hr close above 0.8489 is an unhealthy indication the uptrend may resume. The only scenario that would trigger strong weakness in EURGBP is a false breakout. We are closing 30% of EURGBP short trade at market price (0.8500), stop remains at 0.8516.

03/01/16 UPDATE II: EURGBP triggered the protective stop following the 4hr close. We have reduced the loss due to the partial realization.

GBPCAD Trade Alert

Please click on the chart to enlarge:

The Weekly Update: First Signals in 2017

GBPCAD Weekly Chart 03/01/17

GBPCAD long at market price (1.6439)
Take profit: 1.6840
Protective stop: 1.6315
Risk Ratio (RR): 1 : 3 (approx.)
Estimated duration: 16 days

Note: We decided to opt for GBPCAD following a re-test of 1.6425 on shorter time frames. If timed correctly the trade should be in a fair profit within the next 24 hours. This is a weekly entry.

04/01/17 UPDATE: NZDUSD closed at a resistance it must overcome to maintain steady gains in the market. Although by the book there is no need for a partial realization as this is a monthly entry we have decided to close 10% of the long trade at market price (0.6967).

05/01/16 UPDATE: By the book it is too early to shift the protective stop to the entry as this is a monthly chart, however, we would like to limit our market exposure as new entries are beginning to shape on the weekly chart.

Please click on the chart to enlarge:

The Weekly Update: First Signals in 2017

NZDUSD Monthly Chart 05/01/16

We are closing 30% of the long trade at market price (0.7023) and shift the protective stop to the entry.

05/01/16 UPDATE II: As the Canadian data is due tomorrow there is fair possibility it may trigger a spike in CAD pairs and crosses. Aside CADJPY, we cannot fully determine the trend for the Canadian Dollar. Our entry in GBPCAD was due to a strong GBP rather than a weak CAD. As a precaution we are closing 20% of the long trade at market price (1.6434). The entry has not been invalidated, these are precautionary measures. We have shifted the protective stop to 1.6309.

05/01/16 UPDATE III: GBPCAD triggered the protective stop following better than expected employment data. We were able to downsize the risk by 20%.

CADJPY Trade Alert

Please click on the chart to enlarge:

The Weekly Update: First Signals in 2017

CADJPY Weekly Chart 06/01/16

CADJPY short at market price (88.22)
Take profit: 84.80
Protective stop: 89.60
Risk Ratio (RR): 1 : 2.4 (approx.)
Estimated duration: 21 days

09/01/17 UPDATE: NZDUSD is trading at 0.7013 at the time of this writing, we are closing 10% of the long trade at market price, stop remains at the entry.

09/01/17 UPDATE II: As this is a weekly entry (CADJPY) we require a larger distance from the market in order to shift the stop to the entry. We are nevertheless closing 10% of the short trade at market price (87.76).

10/01/17 UPDATE: CADJPY is trading at 87.67 at the time of this writing.

Please click on the chart to enlarge:

The Weekly Update: First Signals in 2017

CADJPY Weekly Chart 10/01/17

We are closing 20% of the short trade at market price and shift the protective stop to the entry.

10/01/17 UPDATE II: We decided to close NZDUSD long trade at market price (0.6995). Although the monthly entry is in place there are early indications for NZD weakness.

11/01/17 UPDATE: CADJPY triggered the protective stop by a fraction of a pip before reversing lower prior to Donald Trump’s press conference. Some of our subscribers are still in the trade but our protective was triggered, ending the trade with a profit due to the partials’ realization.

The Weekly Update: First Signals in 2017

As all trades are closed this page can now be accessed by all traders. Open trades and relevant intraday strategies are restricted to members only. We have been providing trade alerts in the Forex market since May 2014.
The Weekly Update: First Signals in 2017
MEMBERSHIP PLANS INTRADAY STRATEGIES OUR TRADE ALERTS
The Weekly Update: First Signals in 2017