Forex Signals Brief August 7th – 13th, Get Ready for the Technical Game
Arslan Butt • 4 min read
Welcome back, traders. A new week always comes with many new opportunities to pocket some pips. Looking at a bird's eye view of the charts, it's clear this week's market is all about technicals, and a bit about fundamentals. Let's see how to make it work in our favor…
Top Economic Events This Week
New Zealand Dollar – NZD
On Monday, trading sessions will begin with inflation expectations q/q data from New Zealand at 3:00 (GMT). The previous figure is 1.9% whereas, the consensus forecast isn't given. Any dramatic change will fluctuate the NZD currency pairs.
Later, on Wednesday at 21:00 (GMT), the RBNZ is scheduled to release the Official Cash Rate. Though the central bank isn't expected to change the rate from 1.75% (previous), the RBNZ Rate Statement and RBNZ Monetary Policy Statement will be worth watching.
At 22:00 (GMT), RBNZ will conduct a Press Conference. Previously, the RBNZ and Governor Graeme Wheeler have tried to talk down the kiwi. Will they succeed this time as well? We will have to wait and see.
US Dollar – USD
On Thursday, the US Department of Labor is expected to release Unemployment Claims at 12:30 (GMT) with a forecast of 244K, higher than 240K (previous). The PPI m/m is expected to remain the same at 0.1%. We may experience slight volatility over this. On Friday though, the US pairs will shake for sure.
On Friday at 12:30 (GMT), the United States will be releasing the CPI and Core CPI. Both measures are expected to rise by 0.2%. Later at 13:40 (GMT), FOMC Member Kaplan is due to speak about economic conditions and monetary policy at an annual continuing education event for accounting professionals in Arlington. Audience questions are expected, so the market will remain uncertain.
Great Britain Pound – GBP
On Thursday, the Office for National Statistics will release the Manufacturing Production m/m at 8:30 (GMT) with a forecast of 0.0%, higher than the previous figure of -0.2%. This is important because It's a leading indicator of economic health. Production reacts quickly to ups and downs in the business cycle and is correlated with consumer conditions such as employment levels and earnings.
On the fundamentals side, that's the gist of it. So, let's take a look at the major trade setups for this week.
Top Trade Setups This Week
NZD/USD – Celebrity Of The Week
Looking at the 4-hour chart, the NZDUSD has formed a Head and Shoulder pattern with a neckline at $0.7405. A break below this will help sellers target $0.7335. However, above $0.7405, the pair has the potential to stay bullish until $0.7450. Odds are higher for a bearish breakout. Check out our FX Leaders head and shoulder trading strategy article to gain a better understanding of the trade idea.
NZDUSD – Head & Shoulder Pattern – 2-Hour Chart
NZD/USD- Key Trading Levels
NZD/USD Trade Plan
The idea is to wait for the market to break below $0.7400 before entering a sell position in order to target $0.7335.
EUR/USD – Breakout of Bullish Channel
As mentioned in my earlier update, I pointed out the bullish channel in the EUR/USD. Finally, the EUR/USD broke out of the bullish channel after testing the top edge of the bullish channel near $1.1900.
For now, the pair is consolidating below this channel, with an immediate resistance at $1.1840. The Stochastic is also coming out of an oversold range and in my opinion, we should wait for the EUR/USD to complete 61.8% Fibonacci retracement at $1.1835. It will help sellers take another entry somewhere around $1.1840 trading level.
EUR/USD – Bullish Channel Breakout
EUR/USD – Key Trading Levels
EUR/USD Trade Plan
I will be looking to enter a sell position below $1.1840 in order to target $1.1735 with a stop loss above $1.1890.
USD/JPY – Double Top Pattern In Play
The safe haven currency pair initially lost its appeal after better than expected labor market figures from the United States. The market turned to "Risk-On" sentiment and started investing in the stock markets while withdrawing from gold and Japanese Yen.
As of now, the USD/JPY has reached below the solid double to the resistance level of $111. This level is going to be a game changer for USD/JPY. A break above this level will open further buying room until $111.600 & $112. While, below this, the market has the potential to target $110.10.
Stochastics is over bought and it's making it difficult for buyers to break the double top resistance level at $111. In fact, we don't have any fundamental from the Japanese economy which can influence the trade, meaning the US fundamentals will rule the market.
USD/JPY – Bearish Channel & Double Top Resistance
USD/JPY – Key Trading Levels
USD/JPY Trade Plan
I'm looking to stay in sell only below $111 to target $110.150 with a minor stop loss of $111.250 as above this the market may enter into buying zone.
Good luck traders and keep following for more exciting trade ideas.