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Home / Market Analysis / Nov 27: The Best Forex Setups And Technicals For The New Week

Nov 27: The Best Forex Setups And Technicals For The New Week

Those are exciting and very interesting weeks for us reversal traders. Our patience keeps getting tested but the trades that result from that are worth the wait. Especially the AUDNZD long trade last week was a textbook reversal and I got a lot of emails from people saying they see a big improvement in their trading after going through our YouTube channel, enrolling in Edgewonk’s trader development course and following the watchlists here. This is very motivating and a big thanks for all the feedback 🙂

This week, I will first take a look at Gold and the US-Dollar to get a basic overview of the markets in general and then discuss the 6 best Forex setups.

 

Gold

With the S&P500 grinding higher and hitting all-time highs, the market seems to be euphoric after the Trump election and the general outlook for the economy. With that, Gold keeps selling off as investors are looking for high yielding investment opportunities and the safe haven demand is fading.

Gold just broke the 1200 support and the next level below, after breaking the 38Fibonacci retracement, is at 1120. How low Gold can fall all depends on how high the S&P500 can climb. Once you see a reversal in the S&P, expect to see the turnaround in Gold as well.

Gold

 

US-Dollar

The Dollar broke the resistance at 100 2 weeks ago but last week, price was struggling at the new highs. You can see that the last week’s candle is a Doji which should not surprise us because after such a sharp incline into new highs, a consolidation is likely.

The questions everyone has is can price resume the bullish trend or will we see a turnaround? With the probable  upcoming FED hike, more upwards pressure seems likely but profit taking can help some of our USD reversal trades. Also, keep in mind that it’s NFP once again next week.

DXY

 

CAD/CHF

The trade that seems to be playing out already is the short on CADCHF last week. On the left daily chart, we can see a huge resistance cluster with the trendlines. On the right, we can see how price exited the top with increasing short momentum – don’t chase price if you missed the break. It will be interesting to see how we open Monday and if price falls back into the top or keeps dropping. There is quite some downside potential if price resumes the trend lower.

CADCHF

 

EUR/JPY

The EURJPY has reached an interesting resistance area after rallying for weeks. Many traders ask themselves how high can this pair fly and when is it time for a correction? The Yen weakness could also be a result of easing safe haven flows and that’s why keeping an eye on the stock market is so important for FX traders these days.

When we look at the right chart, we can see a slight increase in volatility at the 120 supply level. However, a deeper push into the zone could be likely.

EURJPY

 

EUR/USD

The EURUSD zone at 1.05 is probably the most watched price level at the moment. It’s what we call a crowded trade because everyone is trying to get into the EURUSD long. Expect to see an increase in volatility or a sudden burst – both moves have the goal to shake out the weak hands. Interesting play but if the profit taking on the USD was just a short-term move, expect to see a deeper push.

EURUSD

 

NZD/JPY

The YEN weakness can also be observed here and the NZDJPY has already broken its resistance level. The next resistance is at roughly 81. The main reason why this chart is on the watchlist is because of the large downside potential and because of the extended trend it shows right now. However, this does not mean that price can’t continue to rally further.

NZDJPY

 

USD/CHF

Another reversal seems to be playing out right now on the USDCHF. The USDCHF dipped into a supply area on the daily chart and it seems as if price has picked up some selling momentum – or profit taking on the longs. The trendline on the 4H is still holding so far. If the Dollar Index reverses to the downside, this could give a good reversal opportunity.

USDCHF

 

USD/JPY

And here is the 3rd Yen pair. The USD strength and the Yen weakness is very obvious and price has reached a strong supply/resistance area, starting at 114. The turnaround on the 4H isn’t convincing yet and we need a stronger push lower but it’s worth waiting a little bit longer for this pair – the correction potential is substantial.

USDJPY

 

And that’s it for this week. There are a few more setups happening right now but with this watchlist I want to show you what I am looking for in a market and empower you to do your own Sunday watchlist.

Happy trading!

 

 

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