What to Watch for this Week?

The USD Index closed the week around 92.55 a meagre 87 points off the 2018 high of 93.42 hit last Wednesday. Of course, the weaker US CPI data last Thursday was the catalyst for the move back down, but it was hardly an aggressive sell-off and let’s be realistic, it was massively overdue a correction, after rallying 420 pips from 89.22 to 93.42 in the past 4 weeks.

It looks to me that it’s simply recharging for another crack at the topside and the best thing is we have a new nicely formed resistance trendline to focus on for an entry.

Now the secret to making cash here isn’t sitting around waiting for US economic data to give it direction. Overall direction for the USD to me is still upward.

And until it breaks down through support currently at 91.75 I’ll consider that the case and I’ll be looking to get long USD on dips or on a break above resistance currently at 92.66.

So basically we know exactly what the USD is doing and where the major changes in momentum will be. We can use this knowledge to hit the market on other currency pairs as economic data is rolled out in Europe and Australasia.

This week we have a great structure of economic data with US retail sales scheduled for Tuesday. And we don’t have a lot of other US data so hopefully, Tuesday’s US data has a high degree of variance from the forecast and that should give us USD direction for the week.

So the answer to our question: Is the USD reloading for another crack at the topside? should come from the US retail sales data on Tuesday.

After that, we can sit back and follow the UK, Eurozone, German and Aussie data and pick the USD off.

If the USD has direction, either up or down, trading is significantly easier as you may have experienced over the past month.

So wait for direction to reveal itself and then just be patient and wait for your levels. Easy right!

This Weeks Key Fundamental Drivers

Tuesday 15th

UK Average Earnings

Forecast: 3M Y/Y +2.6%, Excluding bonus Y/Y 2.9%

EuroZone Gross Domestic Product

Forecast: Q/Q 0.4%, Y/Y 2.5%

US Retail Sales

Forecast: M/M 0.3%, Ex-auto M/M 0.5%

Wednesday 16th

Eurozone CPI

Forecast: Q/Q 0.3%, Y/Y 1.2%

Thursday 17th

AUST Employment Change & Unemployment Rate

Forecast: Change +20.0K, Unemployment Rate 5.5%

Friday 18th

CAD CPI & Retail Sales

Forecast: M/M 0.4%, Y/Y 2.3%

Technical Set Up – What’s Happening with the Majors

The AUDUSD & EURUSD & the USDCAD are the only 3 pairs to break the current trends. The AUDUSD & EURUSD though look more structured whilst the USDCAD was pushed about by major economic data.

GBPUSD & NZDUSD remain in their downtrends, albeit with a bit of sideways trading now.

USDJPY continues to grind sideways as mixed USD fortunes plus geopolitical events continue to muddle direction.

Plan the Trade, Trade the Plan!

The idea of our “Market Insight” is to give you some guidance into your daily preparation.

Your Daily Analysis needs to become habitual – For full guidance on our daily routine click here.

Make sure you don’t waste unnecessary time in front of the screens.

Remember you need to be fresh, confident and ready to trade and by sitting aimlessly in front of your screens you will become stale and uncertain.

The key to your success: Isolate the opportunities that work for you and focus on them.

Don’t worry about things that you can’t make…..chasing them will only cause problems (tiredness & irrational behavior will take over).

Tune up your charts & get ready to trade…..