End Of Week Brief: Two Forex Setups For The Weekend
Shain Vernier • 2 min read
The end of the week can be a challenging time to trade. Often, one’s performance over the past four sessions dictates Friday’s trading plan. While it is always great to grab one last winner for the road, a late mistake can take away hard-earned profits made earlier in the week.
A comprehensive trading plan, including pre-defined risk parameters, is an absolute must-have in the trader’s arsenal. As we roll towards the forex close, let’s take a look at a few upcoming trade setups.
Open Trade Management: USD/CHF
Earlier today I issued a trading plan for the USD/CHF. The long from .9770-.9776 has been elected and is active.
Thus far, the trade is in the green having produced a maximum of 18 pips. From a position management standpoint there are two things to do:
Flatten at today’s close
Let it ride into Monday’s session
It is important to be aware that holding positions into the weekend can be either good or bad. Sunday’s open can present a myriad of scenarios. If this trade rallies towards .9800 in the +25 pip range during today’s session I will be taking profits.
If not, I will be moving my stop loss to the intrasession low -10 pips.
The EUR/USD has been tricky lately, trading sideways with choppy price action.
EUR/USD, Daily Chart
It looks as though the USD is primed to make a late 2017 recovery after being slammed all year. We will see what happens, but there are a few areas to be aware of as we approach next week’s trade:
This week’s low of 1.668
August’s spike low of 1.1662
38% retracement of current wave at 1.1731
I expect to see sideways trade on Sunday’s open with a test of August’s low possible early in the week. This area has held a proximity test of 1.1668 and is primed for another. Scalping longs from this area, either above 1.1668 or above 1.1662 is a good plan to capitalize upon high participation.
In the event that August’s low is taken out, it is best to be short or on the sidelines. This is a key level and one that institutional players are watching.
On Tuesday, I recommended a long in the USD/CAD that was stopped out. It can be difficult to correctly identify sentiment and still lose. But, that is part of the trader’s job description.
USD/CAD, Daily Chart
The 78% retracement level of the macro-wave on the daily timeframe is a big deal. It was formidable resistance, and today’s low of 1.2531 speaks to its relevance. A few observations on this market:
The 78% retracement is a key level moving forward. It will serve as support in the short-term.
In the event that 1.2530 is put in the rearview, 1.2662 is the likely destination.
The sudden weakness in WTI crude oil does not bode well for the Canadian dollar. If we see more crude sellers, a test of 1.2650-1.2662 is in the cards.
This market is primed for a position long. If we get a compressed Sunday/Monday close, there will be a valid stop out for the long trade and the trade will be on. Stay tuned!
Bottom Line: Next week is always the best week, full of opportunities and action. Fill out this week’s trading journal and get some rest. The markets resume business in a bit over 48 hours!