FX Renew End of Day Signals Order Sheet 13 May 19

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FX Renew End of Day signals are trades based off our Weekly Trading Opportunities Report. Entry orders are set and trades are managed once a day in the hour after the US market closes, though there may be the odd time the trade needs management intra-day depending on the market. You will receive a more detailed update once a week containing strategy notes or a shorter update during the trading week if anything is required to be done with a live trade. 

Trade Management Updates

In this section we let you know any updates to existing or closed positions.

NO UPDATES TODAY

New Signals

If there are any new trades you need to place you will find them here.

Here is a brief user guide.

  • Put an order to close 25% of your position on each profit target. If any of the targets say “trail” then don’t add a target as we are letting this portion run.
  • Entry orders on Tuesday to Friday are “market orders”. Orders on Monday are “stop” orders
  • You can view current trades in the Signals Matrix

NO NEW SIGNALS TODAY

Strategy Notes

Strategy notes outline what we are looking to trade and why. For further analysis of the technical and fundamental picture you can read the weekly report or watch the weekly video. 

Brief Summary

  • There is no change to the existing strategy. We continue to look to short EUR vs. USD and GBP on a pull-back.

USD (DXY)

Long DXY, Buy on Dip
  • The fundamental picture remains bullish for the USD with divergence in economic performance and monetary policy between the US and its main counterparts continuing. 
  • While the Fed is more dovish than it was, lets not forget rates are steady at 2.5% while others around the globe are lower and looking to cut or negative.  
  • Bond yields have started bottom but still remain within the downtrend. Importantly US bond yields are relatively stronger against most counterparts. 
  • The key development has been the lack of progress in trade talks and the subsequent implementation of an increase in tariff rates by President Trump. This is bearish USD based on the price action, but this may change if stocks sell-off heavily, as the USD is an attractive safe-haven option.  
  • The breakout remains at risk of failing, and the safest strategy is to buy on a dip. My preferred USD long is vs. EUR where divergence is most pronounced. 

GBPUSD

Wait for now, watching for long-term buying opportunities. 
Bigger picture, once Brexit is actually resolved, much of the fall from 1.70 may well be undone. This leaves a move back towards 1.50-1.70 as a strong risk/reward opportunity. There may be buying opportunities from either 1.28 or 1.25. It is clear that a orderly Brexit is preferred by most parties and but things remain at an impasse. The BOE is in agreement with this view and is providing the impetus for GBP to shift higher. Given the preference to short EUR, I prefer to look for selling opportunities on EURGBP instead of GBPUSD. 

USDJPY

Wait.  

The currency pair is sensitive to negative developments in the trade dispute between the US and China. Stocks are currently sitting at key resistance and are vulnerable. If stocks do sell-off then we can expect a move towards 1.04. Technically we are stuck in the middle of a range that developed in 2017. The risk/reward is not good enough to buy the currency at the moment so its best to wait until the edge of the range at 115 for a selling opportunity. If the pair does fall to 104 or preferably 100 we will look to buy.  

AUDUSD

Wait, potential bottom?
Recent developments have not been positive for AUD. We have the risk of a major bearish reversal in stocks. Trade talks between the US and China have not progressed as hoped. The RBA is expected to cut rates possibly twice this year. Technically, there is a potential major bottom in place. Despite the bearish developments, price is holding around the key .70 level. The best risk/reward trade is to buy from these levels, but the fundamentals don’t really line up so I prefer to wait. 

EURUSD

Short, sell a rally. 
The divergence in economic performance and monetary policy between Europe and the United States is clear. European data is tepid (though starting to show some signs of recovery). In contrast US data is quite decent. While the Federal Reserve has become more dovish, the ECB has been talking about measures to support negative rates, suggesting that they are in no hurry to raise them. Volatility has been at  extreme lows in the EUR. The fundamentals and long-term trend remain bearish so we look to sell on a rally to resistance. 

NZDUSD

Wait.  
We had a rate cut last week, but the school of thought is that it will be a “one and done” approach from the RBNZ. Data has been deteriorating in general. The risk/reward is not there to short the pair just now.  

USDCHF

Wait, potential selling opportunity if we can a major dose of risk-off 
The pair is re-testing the breakout level. If resistance in the stock market holds and there is a full-blown stock rout on the back of trade war concerns then selling USDCHF could be a good opportunity as the risk/reward is there. Patience is required to see how this all plays out.  

USDCAD

Wait. 
We remain within the longer-term uptrend. There has been some stellar data out of Canada. Oil is holding above $60. Yields have moved in favor of CAD. The long-term uptrend in USDCAD remains in-tact and the pair has been stuck in a range since Feb. We can expect this to continue for now. 

EURGBP

Sell from 0.8720. 
Now that the risk of a hard Brexit is out of the way for the next few months, we can look to sell EURGBP. There is an opportunity for GBP to recover from the negativity that has been priced in since Brexit began. Meanwhile, the EUR has negative rates, a dovish central bank and consistently poor economic data. The sideways volatile MT presents us with an opportunity to sell from the top of the range. 

A Note on the General Approach

The objective of the signals is to capture long-terms moves in the market. We use big picture technical and fundamental analysis to determine opportunities that have a superior risk/reward opportunity. We then stalk entry points where we can have a relatively tight stop. Once we are in a trade we look to add to the position in the early part of the move. We will take profit when conditions suggest, while holding a core position to our target. The goal is for the winners to be much greater in terms of R-multiple than the losers.

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