It’s been a busy week for forex traders, and here, we have three out of five of our featured forex strategies working well!
Check out this quick review to see how price action and catalysts have played out!
Forex week setup: AUD/USD – April 24, 2023
On Monday, AUD/USD was our forex setup for the week with first-rate inflation reports on the calendar from Australia and the United States that could spark significant swings in the currency pair.
AUD/USD fell sharply ahead of the upcoming AU CPI event, over 1 DATR, raising the odds of two scenarios playing out in the event release: a “buy the rumor, sell the news” scenario or what we actually are, there was no Lots of movement either way.
For those of you who read Monday’s Australian CPI event guide and went with our bearish bias, you probably took the short side of the pair. Congratulations if you did because the drop was very large (more than 100 pips) and the bears managed to hold most of the gains for the weekend.
Australian Dollar / New Zealand Dollar: Tuesday – April 25, 2023
AUD/NZD 1-hour trading chart
On Tuesday, we discussed a possible selling strategy for the AUD/NZD after the pair broke below the rising lows and bullish simple moving averages pattern on the hourly chart.
With the market trading around 1.0825 later, our strategy has been to sell AUD/NZD and target the 1.0790 – 1.0800 area if the CPI comes in weaker than expected. We also thought the pivot point level at 1.0870 was a potential resistance area that could hold on a bounce.
Unfortunately for us, we didn’t get that bounce, but that doesn’t mean it wasn’t a good week for the bears, as the AUD/NZD has fallen like a rock this week, dropping almost twice as much as the daily ATR for a trading test. 1.0700 before the weekend.
USD/JPY: Tuesday – April 25, 2023
USD/JPY 1-hour forex chart
We were feeling very confident on Tuesday and decided to place another setup, this time on USD/JPY as the pair was heading higher and testing a resistance area.
This was actually a tricky one because the basic arguments can be made for both the bulls and the bears, and the next move will ultimately depend on the higher level economic updates and events coming in at the end of the week.
We headed lower cautiously and thought that if we see a break-down of the rising lows pattern, it could take the market to 132.75-133.00 area.
USD/JPY made several moves below the uptrend line, but was not able to convert that into any downward moves. Unfortunately for our downtrend, the BoJ event sent everyone back firmly into bearish yen sentiment, most likely due to speculation that the BoJ will not return to normalizing monetary policy anytime soon.
EUR/USD: Wednesday – April 26, 2023
EUR/USD 1-hour trading chart
On Wednesday, we noticed how the EUR/USD appeared to be in consolidation mode, as upcoming US economic events are likely to add some movement to the pair.
We have headed to the upside for the pair due to the technical setup on the hourly chart, indicating the possibility of a support bounce, especially if the US Durable Goods data comes out positive.
Well, this is quite similar to what happened as buyers started jumping into the pair ahead of the US Durable Goods Orders event.
This is related to the broad strength of the euro against major currencies, which may be a reaction to the comments of European Central Bank officials during the London session, in which they confirmed the expectations of the European Central Bank raising interest rates at their next meeting.
Unfortunately for the bulls, the bullish momentum could not hold, likely due to some profit-taking ahead of higher-level economic releases from the US on Thursday and Friday. Congratulations if you managed to get some short term points on this setup.
USD/CHF: Thursday – April 27, 2023
USD/CHF 1-hour trading chart
On Thursday, we spotted this descending triangle on the USD/CHF pair, with expectations that the US dollar is likely to make moves in upcoming key US economic data during the US session.
Our expectation was that if the US GDP report came out as weak as the Atlanta Fed GDP tracker was now suggesting, the US dollar could lose points across the board including against the CHF.
There were several ways to play this prediction, either by staging a short position or waiting for a break below the descending triangle pattern for the more conservative types.
Unfortunately for the bears, neither situation occurred as USD/CHF rallied sharply prior to the US GDP event, breaking the triangle to the upside, and for reasons unknown. Best guess is that USD/CHF has been rallying amid broad risk sentiment, likely triggered by a heavy round of mostly positive US earnings data.
We got a much weaker-than-expected GDP reading of 1.1% qoq vs 2.3% qoq forecast, but this bullish event is probably due to the release of the quarterly core PCE price index (preferred measure of inflation). at the Federal Reserve Bank). In hot weather, it increased by 4.9% qoq vs. 4.1% qoq expected.
So no luck here, but if you played the descending triangle as a scaling setup, you probably caught the upside and hopefully you were able to take full advantage of this strong intraday move.
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