The Weekly Update: USD Upcoming Trend and JPY

Risk Appetite Mode

GBPAUD resumed its weakness without correcting higher, which has prevented us from initiating a short trade in the cross as we updated last week. The only option we may have is EURGBP, however, initiating a long trade once the pair has already began trading higher is associated with higher risks.

USDJPY Signal Strategy

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The Weekly Update: USD Upcoming Trend and JPY

USDJPY Daily Chart 06/05/18

We have been monitoring USDJPY as noted in the prior updates we issued via email. We have noted that reversed Head-And-Shoulders (H&S) is developing on the daily chart. We require the price to trade near 108.20 before considering to initiate a long trade in the pair.

Although it is challenging to determine that the price will in fact trade near 108.20, if it will materialize it may be some time this week.

EURUSD Signal Strategy

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The Weekly Update: USD Upcoming Trend and JPY

EURUSD Weekly Chart 06/05/18

Despite the breakout in the weekly chart we are not convinced EURUSD will continue trading lower. Although it may appear the price may rebound from current levels it is essential 1.1860 will be successfully tested by the market. We are not entirely pleased with the negative swap that is incurred at the rollover but EURUSD is positioning itself for moderate gains.

What we will also have to consider is the estimated duration as based on the weekly chart it may require remaining in the trade for over 60 days.

AUDJPY Signal Strategy

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The Weekly Update: USD Upcoming Trend and JPY

AUDJPY Daily Chart 06/05/18

AUDJPY may have provided a long entry due to a reversed H&S that was painted in the daily chart. It is not a clean entry as the right-hand shoulder was affirmed by the candlesticks’ shadows and not the body itself. We have also noted a weak entry in AUDUSD and that GBPAUD weakness may continue.

We suspect the potential gains in AUD may be linked to the upcoming budget release rather than the retail sales, both due later this week.

To recap, on 12 May, 2018 President Trump is due to announce whether the US will withdraw from the nuclear deal signed with Iran. We have seen some gains in crude oil as a result. We are aware that we anticipated moderate gains in oil earlier this year, however, we were unable to enter the commodity with a reasonable stop.

Based on the above analysis it appears the market is positioned for risk appetite mode. We will decide whether we wish to opt for AUDJPY after the opening the Forex market once the spread stabilizes.

AUDJPY Trade Alert

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The Weekly Update: USD Upcoming Trend and JPY

AUDJPY Daily Chart II 06/05/18

AUDJPY long at market price (ask 82.28)
Take profit: 84.60
Protective stop: 81.17
Risk Ratio (RR): 1: 2.0 (approx.)
Estimated duration: 18 days

Relevant as long as AUDJPY is below 82.65

Note: The potential drawdown is a re-test of 81.60.

08/05/18 UPDATE: AUDJPY triggered the protective stop, we are not re-entering the market.

GBPAUD Trade Alert

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The Weekly Update: USD Upcoming Trend and JPY

GBPAUD Daily Chart 08/05/18

GBPAUD short at market price (bid 1.8172)
Take profit: 1.7870
Protective stop: 1.8305
Risk Ratio (RR): 1: 2.2 (approx.)
Estimated duration: 7 days

Relevant as long as GBPAUD is above 1.8130

Note: This is our final attempt in AUD pairs and crosses. The potential drawdown is a re-test of 1.8280. We are expecting the market conditions to normalize as the US position on Iran’s nuclear deal has been officially affirmed. Our next target is likely to be USD pairs and crosses.

10/05/18 UPDATE: GBP selling in today’s session combined with a firm AUD pressed GBPAUD lower. The price is nearing its daily support in a single session, it often creates room for corrective gains although it is not guaranteed.

We cannot lower the protective stop from the entry if it is shifted after the daily close. If we remain in the trade the take profit may be triggered tomorrow but the daily close has to be lower than current levels.

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The Weekly Update: USD Upcoming Trend and JPY

GBPAUD Daily Chart 10/05/18

It is a tough decision but we are unwilling to absorb retracements. GBPAUD is trading at 1.7944 at the time of this writing, we are closing the short trade at market price.


AS THE OBJECTIVE OF THE STRATEGIES HAS BEEN MET THE ANALYSIS IS NOW ACCESSIBLE TO ALL TRADERS


The Weekly Update: USD Upcoming Trend and JPY

The Weekly Update: USD Upcoming Trend and JPY