The past five sessions have given us some fantastic opportunities on the forex. The majors are on the move, with early 2018 having been defined by heavy action and participation. Indices, commodities, and cryptocurrencies are all going full-throttle. It is a good time to be in the markets.

In my opinion, it is always good to have an empty weekend economic calendar. Not having to deal with central banker commentary impacting Sunday’s open is nice.

However, there are several big events scheduled for Monday’s U.S. and overnight session. First, the Chicago FED is going to weigh in with their National Activity Index (Dec.). As we near the January 31 FED meeting, commentary from members will have greater influence. This release has the potential to breathe some life into the USD.

The second big happening on Monday (or Tuesday, depending on where you are), is the Bank of Japan (BoJ) Interest Rate Decision. The current rate is -0.1%. Given such strong numbers out the Nikkei lately, I would be surprised if there is any movement in rates. If there is, expect fireworks in the USD/JPY.

EUR/USD Technicals

Recent trading conditions for the EUR/USD have been fantastic. The technicals have performed beautifully. Price is currently in a consolidation phase between two key levels.

Earlier this week, the bullish trading plan from Fibonacci support proved lucrative. This area still serves as valid support and will be a key level moving forward.

Here are the levels for the EUR/USD:

• Resistance(1): Swing High, 1.2322
• Resistance(2): Psychological Level, 1.2400
• Support(1): 38% Retracement of Bull Run, 1.2167
• Support(2): 20 Day EMA, 1.2070

Overview: For now, this is a wait and see market. I fully expect a test of downside support levels in the coming days. As the FED meeting nears, talks of an interest rate hike for the USD will come to the forefront. The tone of ongoing FED commentary is likely to attract bears to this market.

Early next week may give us another shot at longs from the 38% level or a possible breakout sell play. It all depends on how things set up in the short-term.

Until Sunday’s open, trade smart and next week is always the best week!