This article was first published on Tradeciety Trading Academy.
Happy Monday traders,
I want to start a new weekly series where I help you with getting ready for the new trading week. I see too often that traders lack structure and good processes which then makes good trading impossible.
In our premium membership, I share a complete market breakdown and my best setups for the weeks in our private forum. The new freely available article series on our blog is designed to complement the breakdown and help you become aware of important developments and price levels.
Technicals and fundamentals
Geopolitical tensions loomed over the Forex market at the end of the last week, although the Syria situation started only escalating on the weekend. Surprisingly, the markets don’t seem to care so far.
The USD/JPY is a good measure for risk sentiment and risk perception but it mostly stayed unchanged in the lights of an upcoming NAFTA agreement and less aggressive statements from Trump regarding China and the Trans-Pacific Partnership. The USDJPY opened slightly higher Monday morning but pulled back already. The 108 resistance is a critical level for the pair and US retail sales could act as a catalyst.
The Pound was the winner last
The EUR/USD is what I call a “dead” market and the price action is contracting which means that the highs and lows are narrowing and the swings become smaller and smaller. This pair has become untradeable and the principles of market cycling and keeping your watchlist fresh becomes obvious here immediately. You just can’t trade the same pairs all the time. Every pair goes through different periods and cycles and you must know your strategy to understand which ones you can trade and which ones to avoid.
Read more: What is a watchlist?
Despite the worse than expected economic data from the Eurozone, the Euro didn’t move much. The ECB is in a tough spot where many experts expect the end of QE but with the strong Euro, it could hurt the economy even more.
The international stock indices show all a similar picture and the price is stuck at the upper end of a resistance zone. The DAX shows it nicely and after a meaningless rejection on Friday, the price opened unchanged on Monday and is hovering below the resistance. The Nikkei 225 opened slightly higher but then the momentum died down and the price remains unchanged.
The players are waiting for an impulse to decide whether the breakout to the upside or the fall lower into the support will be the next move.
The COT report also didn’t show any surprises and major shifts. Only net long positions in the Euro have been rising noticeably while net longs for the Australian Dollar fell. The USD is still a major net short with more net shorts coming in from last week. Crude Oil is still seen as a long without much change from last week. This trade could become crowded and we are seeing already some early morning selling in Crude.
Current Forex winners and losers
News-wise, we are expecting a quieter week and there are just a handful of high impact news. Wednesday is probably the biggest news day. Europe and Asia are underrepresented this week with barely any high impact news and it could mean a lack of momentum.
The Syria situation could be the big unknown this week but as of now, markets do not really care.
I just wanted to inform you that we have 12 seats left for our first in-person workshop which is taking place on May 20th in Hong Kong. Currently, we are still offering an early mover special price.
The post Market outlook, technicals and fundamentals – April 16 appeared first on Tradeciety Trading Academy.