Welcome to my first weekly update that I'm posting to Talk Markets, which includes my video analysis.

The FX Week In Review

USD

We continued higher in the Dollar index with a 1.2% rise, the 94.25 area is still of interest as we look to see if we may have some exhaustion around this area.

EUR

The Euro lost some ground last week and the EURUSD is now below 1.18. After the threat of another election in Italy (no surprise there), we have formed a Populist government, which is very Eurosceptical and Italian government debt sold off with the Euro in fairness holding well. We will see what this political development may bring in the coming week.   

GBP

The Pound last week was still in a quiet faze, with some weak data keeping it under pressure, we will keep a close eye on the Pound this week.

YEN

With the Dollar being so strong, the USDJPY closed at 110.79, but with a negative candle on Friday, we may see some exhaustion or at least a push into 111.00 again then some weakness. We will keep an eye on the Yen against the other major pairs.

The Week Ahead

We must mention two political events first the forming of the Italian Populist Government (5-Star/Northern League Coalition), which will be the first in the heart of Europe and if they can work together and not start in-fighting then we may see some volatility in the Euro. A great Article by Nicholas Farrell in the Spectator on this topic Italy turns on the European Union.

Secondly, it was announced the trade war between the US and China have effectively been put on hold, Steven Mnuchin said. “We’re putting the trade war on hold. So right now, we have agreed to put the tariffs on hold while we try to execute the framework,” Mnuchin said on “Fox News Sunday.” This may have an affect on the Dollar in early trading and on Monday.

Last week US Dollar strength and US yield spiking higher were the main topics for the markets, and those two topics are still in focus, but this week looks quite quiet with no major US economic data, across the pond we have some PMI’s in the Eurozone and the UK numbers on CPI, Retail Sales and GDP. But we always expect some nice movement and surprises in the markets.

Currency Pairs to Watch

We will be developing our ‘Currency Pairs to Watch’ list to have a great overview of the week to help you keep an eye on some pairs. See my video below for technical analysis for CAD/JPY, GBP/AUD, GBP/JPY, USD/JPY, GBP/USD, Gold, and AUD/CHF.

Trade of the Week

So, this week the ‘Trade of The Week’ will look at the USD/JPY. We note from the daily chart a rising wedge and we have reached the top trendline, the weekly chart does show a long bullish candle but the daily shows some hesitation with a spinning top on Friday (at the trendline) this shows indecision, but we need a confirmation candle after to show weakness. Our thoughts are that the US Dollar may still have a bit of strength after the Macro News on China and the 94.25 DXY Resistance in focus. But the USDJPY is at the 61.8% fib retracement with the spinning top may signal a move lower.

We will look for a strong open on Sunday evening and Monday with a move back to 111.00/111.50 but the week may bring a fall back with a focus on Tuesday’s close, so below 110.50 we will look to sell: