End Of Week Brief: Two Forex Setups For The Weekend

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.

EUR/USD Outlook

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.

USD/CAD Outlook

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!