Something I was keeping a close eye on today was whether or not Bears were going to take profit and Bulls were going to buy at the bottom of the range on the UST. With the FOMC’s March meeting coming up and markets already pricing in a hike fundamental analysis tells us that we should be looking for opportunities to buy the USD and sell the Yen though patience and discipline are required this week because we need to wait for the right setup and ensure that we are buying at support and selling at resistance. As far as swing trade is concerned last week was a breeze and if you were true to your bias and entered your trade according to the rules then you made a decent amount of pips. I find that a week like this week is a test. A test to see if you are a disciplined trader and only trade when all your conditions for buying or selling are met. If you find yourself a Bull at resistance and you think you’ll just take the shot then know that you are not trading – you are gambling and the problem with gambling is the house always wins.

UST H4

As per our analysis we identified that price was at the bottom of the range before the new weekly pivots came out. As mentioned in yesterday's post a range trader would be paying very careful attention to this though as we can see bears have sold at the H4 21 though notice that price is currently in the bullish zone for the week. So while the bigger traders with accounts that can move the market sell off that 21 I stand by and am looking for a break of support at MS1 (just below WM2) while knowing that bears don't sell at the bottom of a range so therefore equally expecting price to find support at WM2 and move back up. This is helpful because I have set up conditions in which I will decide to trade and if a breakout does occur then my trade plan would be to trade the breakout. if there is no breakout then I will step back and look for more favorable conditions to enter a trade that agrees with my fundamental and technical bias. Note that I use my analysis on the UST to determine Yen strength and weakness in the market according to the appreciation or deprecation of the UST yield. Something very effective when future interest rates are being decided.

If you are a Bear on the Euro and a Bull on the USD then price action would have compelled you to sell at MPP/ WM3/ 1.06 earlier today with a weekly target of WM1. With the market ranging, an overbought H4 stoch and price at the top of the range and opening at WM3 it's a no brainer. Fundamentally there is a lot going on in Europe at the moment - we have a central bank meeting this week and the French elections have caused some volatility of late though despite all that a bear sells between WM3 and WPP. Bulls are going to defend 1.0550 and 1.05 which is why Bears want to sell high at resistance and not when price is low and at support. I also don't expect any action out of the ECB and I don't see why the markets would be either. The ECB have given no indication of any further amendments to monetary policy until December as per previous statements and minutes. If for some reason I lose money on this trade I am ok with it as I did the right thing as a Bear.

GBPUSD H4

After the beautiful drop last week off the weekly central and price having broken below the weekly target and coming off WS3 the plan for the counter-trend trade was to buy it back to this week's central. As we can see bears have sold at the H4 21. While the H4 21 did provide an opportunity to sell a Bear would have been aware that price was in the Bullish zone for the week and therefore may be considering trading a break of and re-test of 1.22 as a safer short. Notice that price is moving down to the bottom of the flash crash range with Bulls watching 1.21, 1.2050 and 1.20. Ideally the best place to have sold this pair was at 1.2550 on the 24 Feb though the bearish zone between WM3 and WPP does provide some resistance - especially WM3 as it marks the role reversal resistance of the previous bottom of the inside range. While the 21 is below the 55 price action tells us this pair is moving sideways and so using a range trading strategy would be best suited to this par at the moment.

AUDUSD H4

Bears took profit at WS3 at the end of the week. A counter-trend trader would have gone long at 0.7550 with a target of this week's central. We can see that Bears are selling at 0.76 which is the role reversal resistance of the previous range. The daily chart tells me that we are at support. The right price to have sold this pair was at the top of the range at 0.77 / 0.7750. As far as the swing trade is concerned - getting short between WPP and WM2, even if it is off a H4 21, seems risky to me. 0.7650 is interesting though it's in the middle of the range and trading in the middle of the range is not inline with my range trading code of conduct. We need to pay attention to the RBA rate statement tonight - no action is expected though it's the statement that the market will be paying attention to. Also keep an eye on the Chinese data this week.

USDJPY H4

With Bulls having taken profit and Bears having sold at MR1/ WR2/ 114.50 on Friday a counter trend trader would be looking to this week's central pivot as a level to take profit though with price moving sideways a range trader would have also seen last week's high as the top of the range with the bottom of the inside range at 113/ WM2 and the bottom of the outside range between 112/ 111.50 with WM1 just below 111.50. If your fundamental analysis tells you this is going to go higher then your weekly swing trade from last week might be your monthly swing trade with a target of MM4/ MR2. Notice that MM4/ 115.50 markets the top of the greater range just above WR1 and that there MR2 and WR2 confluence at 116.50. If you closed your swing trade at the end of last week and you are looking to get back in you would have to be aware that price is currently in the bearish zone and you are very close to the top of the range. A range is traded by selling at the top or buying at the bottom. The only other time you trade a range is the breakout. Therefore I would like to see price break through and re-test 114.50 as support - getting long as close to support as possible so that I have enough time to my stop at break even while very aware of resistance from 115 and up. If price were to come down to 113/ WM2 then I would expect to see Bulls enter there with a target of WM4 while Bears look to defend the areas highlighted in pink on the above chart.

4 thoughts on “USDollar Weekly Forecast 6 Mar ’17”

  1. Joe urban says:

    Thank you for posting this. I am learning a lot from your posts.

    1. Ryan Gandalf van Jaarsveld says:

      My pleasure Joe – I’ll be uploading one of these everyday

  2. Dalmas Ngetich - FOREX.TODAY says:

    thanks Ryan. wonderful insights here. I’m following the Yen closely, if it does breach the 114-15 barrier, I’m going long on any pullback. what are your thoughts on gold bro

    1. Ryan Gandalf van Jaarsveld says:

      hey Delmas Thanks for the feedback bud. The monthly target for Gold is MM1 for bears. Having broken through MM2 and MS1 I don’t see a target for Bulls. H4 and H1 are also very bearish. Being a bear on gold this works great for me. Be aware of the monthly profit zones on USDJPY at the 115.50, 116 and 116.50 levels. Hope you are well my friend!

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