IYF10th - 14th June 2019

Head Trader Market Watchlist:

Hello Trader’s!

Welcome back to another week in the financial markets! I hope everyone had a great weekend?

We ended the first week of the month with a very bearish Dollar due to weak NFP data - only 75k new jobs being added to the economy opposed to a forecasted 185k increase. With a weaker USD and the risk environment very tentative at the moment we saw Gold continue rally and the US Equities following suit towards the later part of the week.

Looking at the beginning of the week the focus will be towards the GBP, will we see some relief across the Pound pairs? We then have US Inflation (CPI) data out on Wednesday and I’m sure the markets will look for any signs of softer inflation following FED Powell's comments last week. Not much for the EUR this week although Draghi is speaking - following last week’s ECB press conference and EUR gains, Draghi may look to put pressure on the EUR.

We may also see more ‘Trade War’ talk as the focus will now be on China again now that it would appear a deal has been done with Mexico.

Let’s have a look at some of my favourite set up’s and the overall direction of the pairs on my watchlist.

Please take a look at the ‘Forex Factory’ economic calendar below, fundamentals to watch out for include;

Monday: GBP GDP & Manufacturing Data

Tuesday: GBP Avergage Earnings

Wednesday: EUR Draghi Speaking, USD CPI (Inflation)

Thursday: AUD Employment & Unemployment, Swiss Franc Monetary Policy Statement

Friday: USD Retail Sales

IYFDXY (Dollar Index)

Daily - We saw price testing the lower structure of the ascending trend line after a very impulsive move to the downside (highlighted). I am expecting some form of a correction here followed by a continuation of the bearish move to 96.00 and possibly even 95.00 very soon.

GOLD

Daily - Current price action is indicating a reversal from here. As you can see we managed to reach the February highs of around 1348.00 on Friday. I have a few area’s of value highlighted which could act as support moving forward for this precious metal. Due to the aggressive nature of the most recent impulse I very much doubt we will see a deep pullback, however the 50% fib level does align with the support at 1310. For those with a higher risk appetite and are looking at shorting this commodity I would recommend entering with a reduced risk. Longer term we are looking for the buying continuation.

IYFEURUSD

Daily - It would appear this pair has shown its hand and we can now look for continued buying opportunities. Price closed above the descending trend line (outer structure) and also closed above 1.1300. A pullback to 1.1200 (61.8% fib) would provide us with the best Risk/Reward trade. However I wouldn’t be surprised if price consolidated around 1.1300 and then continued its bullish momentum. In this case we can look to enter on the breakout of any consolidation.

EURCAD

Daily - As you can see price is still very much corrective having come from an impulsive move at the beginning of the year. Price is currently within the Fibonacci retracement pocket (taken from the last significant low to the current significant high). Notice how the D1 extension (-27%) aligns with the outer structure of this corrective channel. Short term we could look for buying opportunities however if we do see that third touch of the outer structure this could present us with a fantastic short trade.

IYF EURAUD

Daily - Price has been correcting for the last week or so and failed to break below an important support level (1.6060). We have seen bullish price action drive this pair into previous highs. I still favour shorts so we could look for a potential third rejection of 1.6250 (triple top). We don’t want to rush into this as it does have the potential to retest the outer structure one last time if we were to break above the resistance at 1.6250. An unlikely scenario but remember we have to remain as neutral as possible within the markets. Following from our higher time frame analysis I still favour shorts.

EURNZD

Daily - We saw a surge of NZD weakness on market open which has driven this pair higher than expected. My short bias remains and nothing has changed for me. We are simply seeing a deeper correction that expected. Price is still within our Fibonacci retracement pocket and I will be looking for a third touch of the counter trend line for continued selling opportunities.

IYFNZDUSD Daily - I will be looking to buy this pair if manage to see a deep pullback into the Fibonacci retracement zone as this would provide us with the greatest Risk/Reward trade. However, due to the current ‘impulsiveness’ of the most current bullish phase I wouldn’t be surprised if price didn’t retrace deep enough into my preferred buy zone and rejects the intra-day support level at 0.6592 (blue line). Lets monitor price action on the lower time frames for a potential buying set up.

USDJPY

Daily - This pair has been making a nice sequence of impulse and minor corrections ever since rejecting 112.00 - I still believe we may see some continued downside with this pair and we can look for short opportunities as soon as the market provides us with enough confirmation. Downside targets will be the lower structure around 106.00. Note that we still need to ‘fill the wick’ from the flash crash at the beginning of the year.

IYF USDCAD

Daily - Price finally broke out of the corrective channel after rejecting 1.3500 and hammering through the Monthly level of 1.3400. I will be looking to sell this pair on either a retest and confirmed rejection of the highlighted zone (1.3300) or like I’ve mentioned with a few Dollar pairs we could look to enter on the breakout of a minor correction if price does not retrace deep enough. Either way selling opportunity's are looking fantastic with downside targets set at 1.2900.

USDCHF

Daily - Continuing the theme with USD weakness we may be presented with a nice selling opportunity with this pair. As you can see price has been making a series of nice impulse and corrections. We have now broken support and also the long term structure (ascending trend line).

IYFGBPAUD

Daily - I will be looking for continued selling opportunities with this pair. I wouldn't be surprised if price wicked above 1.8250 to retest the descending trend line before rolling over. As you can see price has come from an aggressive impulse move and is simply in its corrective phase. If we break and close above the trend line then revisiting 1.8500 is not out the question either for a deeper correction.

GBPJPY

Daily - A potential sell set up if we see a deeper correction into the Fibonacci Golden Pocket and Monthly level of 140.00. Since price broke above the descending trend line and combining my fundamental outlook on the Japanese Yen I think we could see a deeper correction on this particular GBP pair. If we did see a pullback to 140.00 this would present a fantastic selling opportunity as we would be selling from an of high value.