Weekly Game Plan 05.06.17

Weekly Game Plan

What to Watch for this Week – Events that Matter and Why

We start the week cautiously after another series of terrorist events in the UK and with the election on this Thursday the country will be on edge!

The authorities have done well to contain any fallout and Sterling has only opened up 40 points lower. The fear is of further attacks and this may impact the upcoming UK election campaigns and consequently the whole Brexit issue. This will of course lead to a weaker GBP so keep an eye out for more news.

Also don’t forget most of Europe is on holidays today as is NZ. So it may be a slow scattered start and if there are further incidents in Europe then we may see a bigger move to the downside as liquidity is not at full capacity because of the holiday.

 

Also before you go trading the ‘gap’ ….slow down! There’s loads of trading opportunities this week which are a lot better than trying to make 20-30 points on a gap being closed.

Now this is really the start of the month. We have a fresh round of monthly data on the way and we’ve got two central bank meetings namely the RBA and ECB. Plus there’s a huge amount of high impacting data this week so it’s going to be on for young and old.

USD sentiment – the best thing is we have “clear as day” weak USD sentiment following the release of the last Friday’s NFP data which came out +138K, much worse than expectations of +185K.

I am indeed bearish the USD and it was just unfortunate that we ran out of time last Friday after the release of the US data.

Out of the two orders we placed prior to the release of the US NFP data the Swissie looks the goods.

What’s Happening with the Majors

We’ve got some really good technical set ups to start the week with a mix of currencies sitting in the range and a few that have broken out.

That should give us a good mix of strategies to use this week.

The EUR and NZD have broken to the topside. They are a mirror image of each other so look for a lead although you’d have to expect EUR to do the leading. Don’t forget most of Europe is on holidays today as is NZ. So we may have to wait for Tuesday to trade these pairs.

 

The AUD, CAD and GBP are all trading sideways within recent ranges although Sterling has a clear ‘bearish bias’ following the attacks in London.

USDYEN had a nasty move on Friday so I think the market will start the week cautiously after being beaten up somewhat. There was a false break to the topside above 111.50 before breaking down through 110.60 support. This pair has a huge potential for the downside especially if the next round of US data is weak.

The Swissie has broken down through major support at 0.9670 on Friday. I’ll be looking for retracements back towards this level to get short.

This Weeks IMPACT EVENTS Schedule

Monday 5 June

German, Greek, French & NZD – Holiday

CNY – Caixin Services PMI – this could get the ball rolling for the AUD and NZD. Last weeks weak Chinese Manufacturing data saw the AUD come off 60 points so watch this one.

USD – Services PMI, Factory Orders, Labour Market Conditions Index – This is all peripheral data but if it’s weak it confirms the USD sentiment and we should start to see the USD run.

Tuesday 6 June

AUD – RBA Rate decision & Statement – no chnage in rates expected but we may get a chnage in sentiment in the Statement. Watch this one!

CAD – Ivey Purchasing Managers Index – It’s a good indicator for economic health and it will come into play if we get decent variance in the release.

Wednesday 7 June

AUD – GDP – This is quarterly data which makes it higher impacting then most other data. It’s a big release for the Aussie.

EUR – GDP data – with the EUR sitting precariously above 1.1250 I’ll be watching this one. The market will be looking for an excuse to sell EUR.

USD – Crude Inventories – Oil is a hot topic especially for USDCAD. Any significant changes in inventories can lead to Big moves in the CAD.

Thursday 8 June

UK Elections – this could potentially lead to massive moves on the downside should the Conservatives lose majority control of the Government. If they get in with a majority then you should see GBP strengthen.

ECB – Rate Decision and Press Conference – No changes expected in rates so watch Draghi at the Press Conference for clues to future moves. This may be somewhat overlooked with the UK election underway.

USD – Unemployment claims – with the USD under pressure the market will focus on this data although it’s secondary data.

Friday 9 June

CNY – CPI & PPI – Another potentially important release for the AUD and NZD.

GBP – Manufacturing Production – this has been a big release in the past but we’ll have to see how GBP has settled after the UK election as to whether or not it will come into play.

CAD – Employment data – This is a good chance for the CAD to finally come into play especially because there is no USD scheduled.

Markets in Play – The Best Potential Opportunities

EURUSD

Potential: We could see the Euro shine this week following the weak USD sentiment. Consolidation around 1.1260 will confirm the next leg is up towards 1.1450. ECB Meeting Thursday.

 

GBPUSD

Potential: With the UK elections on this week I am expecting Sterling to be extremely volatile. Trade with caution. We’ve got some big levels and a key pivot level at 1.2758.

 

AUDUSD

Potential: There is the chance the RBA could come out Dovish on Tuesday and this would set the Aussie up for a big move to then downside. We’ve got trendlines both sides so it looks good.

 

That’s about it for now. We’ll know more about what to hit once the market has fully opened on Monday.

Don’t forget the whole picture can change with a random event or crazy data release, so keep an eye on your trendlines and look out for our updates in the Live Trade Zone!

Remember, A goal without a plan is only a wish!

Good luck

Brad

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