Wall Street closes at a record for the first time since end of January
As the Middle East conflict continues, oil pushes up, the indices are dropping, but what does this mean for currencies? Well, let’s find out. Hi, I’m trader Tom, a currency analyst at investing.com. And I’ve been doing this for over 17 years. And now, I’m going to share with you all of my top trade setups for the week ahead. In this vid, we are going to look at the following. We’re going to look at AUD/USD and whether it is finally breaking down and starting to show weakness. We’re also going to look at the EUR/USD as there is some strength coming into the euro. We’re also going to look at the USD Index (DXY). Are we still a US dollar buyer or seller? And we’re also going to take a quick look at Bitcoin as well. So, let’s dive in.
So, let’s start with AUD/CAD. This is a sell trade for me. This is the weekly chart, and as you can see, look at these top wicks. Sellers are coming into this market. There are a couple of reasons for this. Firstly, AUD weakness is starting to come into the market and CAD is strong off the back of oil. As we know with this conflict, oil has been rising which has led to CAD strength. So AUD/CAD sells still make sense. As I said, we are in a weekly uptrend, but ever since we got to this level, just look at all the sellers. We are going to try and take it back down to these last lows, if not further.
If we drop down to the daily chart, it is a bit messy and I am in this trade. Ultimately, we are in a downtrend. Price came up and then dropped, breaking these lows. Now we are in scruffy price action, but as long as these highs hold, because this is where sellers keep coming in, I still think we have room to the downside, potentially all the way down. There is a higher low that creates some ambiguity, but we are still in a downtrend and seeing big bearish candles.
If we drop down to the H4, you can see I am in this trade and have been in it for a while. Stop loss is above the daily highs and I am aiming for at least one-to-one, and potentially letting profits run. If you are not in this trade, there are a couple of ways to trade it. We have a level holding. If it breaks and retests, we can start selling there with stops above and target lower. Alternatively, if price comes back to highs and forms a strong bearish H4 candle, we can sell from there for better value.
I am also looking at AUD/JPY. On the weekly chart, sellers are clearly coming in with those top wicks. We are still in an uptrend, so this is against trend, but sellers are present. On the daily chart, I am waiting for a structure break. If it does not come, I will not trade. If it does, I am interested. The market is still in an uptrend, but if this level breaks, I will look to sell down to the 110 level.
On the H4, we are in a downtrend with lower highs and lower lows, but I still want that daily break. If we get a break and retest, I will sell with stops above the last swing high.
Next is AUD/USD. Again, the weekly shows top wicks and sellers entering the market. The market is overextended at resistance. The target is the 0.69 psychological level. On a daily basis, the market is messy due to volatility from geopolitical events. Despite this, we are in a downtrend and sellers are in control. On the H4, if we get a break of the trendline or a retest into highs with bearish rejection, I will look to sell.
There are more AUD pairs like this, including EUR/AUD. This also shows euro strength. On a weekly basis, buyers are coming into the market despite being against trend. The target is the 1.66 level. On a daily basis, momentum is bullish. On the H4, we are in an uptrend. I will look for retracements into structure or indicator support to buy, with stops below swing lows.
EUR/NZD also shows euro strength. On a weekly basis, despite the downtrend, there are strong bullish candles with room to the 2.00 level. On a daily basis, we have a structure break from a range. On the H4, I will wait for a pullback before entering buys, as that provides value.
EUR/GBP is another buy. On a weekly basis, we are technically in a downtrend, but bullish momentum is building. The monthly shows an uptrend, supporting the move higher. The target is the next resistance. On a daily basis, we have a break of structure. On the H4, a break and retest gives a buying opportunity with stops below.
Now looking at US dollar pairs. GBP/USD shows a strong US dollar performance since the conflict began. On a weekly basis, we have broken structure and are in a downtrend. On the daily and H4, price action is messy, so I focus on the trading range. By identifying stop placement and target, I can enter around the midpoint for a minimum one-to-one risk reward and build positions as price develops.
NZD/USD is another sell. On a weekly basis, bearish pressure is building. On a daily basis, we are in a downtrend with room lower. On the H4, there is a short-term uptrend, so I may take profit and wait for a retrace before selling again.
NZD/CAD reflects Canadian dollar strength. Weekly, bearish candles suggest selling. On a daily basis, we are in a downtrend. Using the trading range, I can enter around the midpoint, targeting lower levels.
Finally, Bitcoin. Weekly, it remains in a strong downtrend. Price has retraced to a key resistance level that previously acted as support and resistance. The reaction here suggests further downside potential.
Those are the trade ideas for next week. Please don’t forget to subscribe, like, and share. Have a great trading week and I’ll see you soon.
