Hey folks, welcome to the weekly Forex trading ideas.
We are in week 33 of 2018. After a wild bull swing in 2017, many of us, including me, were expecting a stronger swing in 2018 but this didn’t happen. Market decides to take a break and start moving sideways.
Then with the ongoing trade war saga and Euro issues (as always – high debt with the mentality of working less, enjoying more), Market starts to move down.
However did anyone of you realise that it is just the Asia and Euro market moving down, US market is apparently still moving near the top range of 2017/2018? So the million question is ARE WE ALREADY IN THE BEAR MARKET? Well, it is anyone’s guess and i ain’t here to debate despite me being very sure that it is still the bull market (just look at the market sentiment will tell a lot, that’s why i like to analyse human’s behaviour).
Nonetheless, let’s get back to our main juicy stuff of the week.
Before any continuation, the same applies for the disclaimer. Do remember to read the disclaimer.
So, the first criminal on the list is none other than the US DOLLAR index (DXY)
During trading week 32, we briefly mentioned on the possible reversal of DXY as it broke up from resistance. Well it did as it formed a nice pin bar on the weekly chart (don’t ask me what are those purple lines, i drew them years back). There are 2 ways to approach this scenario:
- Short usd (aka long xxxusd) as it is retracing. The problem with this is it is likely to be short lived, so do come out with any profit once you see any reaction during the H4 or H1 chart
- Long usd (aka short xxxusd) as it hits certain resistance. The problem with this is you must be willing to accept drawdown if the retracement goes deep.
As one can see, there is no sure win strategy. It is merely a try when price reaches your zone and control your risk. Presenting to you 2 possible trades of the week, and they are USDCHF and EURUSD
USDCHF – as per mentioned last week, we do see possible reversal at the 0.995 zone as price has difficulty breaking through. A short at that price and TP at 0.981 is a quick hit and run trade. Do not expect a huge movement on this unless the swiss government intervene again.
EURUSD – it was sitting on a nice weekly support and we were hesitant to try a long after a strong down move. What a waste. Anyway moving on, we are looking at possible move to the upside before shorting again.
The idea is as such, a long from 1.1365 to 1.1545 before taking a short at 1.1545 if there is selling pressure at H4 around the 1.1545 zone.
Last but not least, a cross pair for you guys to consider.
EURAUD – this pair has broken the support and reacting negatively at the support turn resistance zone. With possible reversal of AUD and continual weakness of EUR, we are seeing this pair to go down a lot lower. And the most juicy stuff? This is still in the resistance zone, so we still have time to pile up the shorts at 1.57 zone and short to 1.534-1.536 zone.
Good luck with your trades and always stay safe by putting your stop loss to break even to protect your capital.
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RISKS ASSOCIATED WITH FOREX TRADING
Trading foreign currencies can be a challenging and potentially profitable opportunity for investors. However, before deciding to participate in the Forex market, you should carefully consider your investment objectives, level of experience, and risk appetite. Most importantly, do not invest money you cannot afford to lose.
There is considerable exposure to risk in any foreign exchange transaction. Any transaction involving currencies involves risks including, but not limited to, the potential for changing political and/or economic conditions that may substantially affect the price or liquidity of a currency. Investments in foreign exchange speculation may also be susceptible to sharp rises and falls as the relevant market values fluctuate. The leveraged nature of Forex trading means that any market movement will have an equally proportional effect on your deposited funds. This may work against you as well as for you. Not only may investors get back less than they invested, but in the case of higher risk strategies, investors may lose the entirety of their investment. It is for this reason that when speculating in such markets it is advisable to use only risk capital.
Risk Disclaimer for Forex Trading
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Past performance is not indicative of future results. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.