Trader thoughts - Trades and set-ups that catch the eye

Chris Weston
Head of Research
17 Nov 2022
The weekly ‘Trade Off’ is out – Blake and I talk about current sentiment – data and event risk that will move markets in the coming week

– we look at set-ups in Bitcoin, GBP, US500, AUDUSD and many others – take a look

Scanning through the charts, it's not hard to find a whole array of markets pushing key levels – USDCAD jumps out as it holds the July highs and looks to be turning higher – a potential long idea on a swing timeframe, adding on a bullish 3 & 8 EMA crossover. The US500 also gets close attention as it eyes the 200-day MA at 4057, although sellers are impacting on any test of 4000.

We see other markets like USDJPY in consolidation mode, with an inside bar on the daily that needs to rectify – GBPCAD has come up as a breakout candidate and this may roll over, or it may start to bull trend for 1.6000+, but longs are preferred.

EURUSD is undoubtedly one that is getting some real attention from clients, where the net position leans short, with 59% of open positions held for lower levels – using the daily timeframe and I am a buyer of strength through 1.0438 and would look more closely at aggressive shorts through 1.0330 – we’ve seen good supply coming in into the 200-day MA and 161% fibo extension of the Sept-Oct rally, and given this wood to chop, it makes sense for a bout of consolidation after the moves we’ve seen through the Oct/Nov (1.0100) double top.

To get EURUSD pumping lower we’re going to see equities rollover and US real rates moving above 1.50% and at this juncture neither are showing any conviction to move to this script. Many have focused on the sheer breakdown of the US yield curve, with new lows in the inversion potentially being seen as a USD positive.

For the systematic momentum traders, we still see modestly positive 3-day ROC (rate of change) on the daily and price holds above the 5-Day EMA. We can use 3-day EMA crossing the 8-day EMA could be used as a stop if long – naturally this surrenders profits if triggered, but if EURUSD does kick up then you’re still in the trade and it takes out the emotion of feeling pushed into taking profits.

One for the radar and I’d imagine a large percentage of non-automated FX trading clients would have been looking at this very chart.

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