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Greetings traders,
I wanted to provide my latest observations on potential opportunities lining up for the week ahead. This week should be a volatile one, with it being the end of the month which means plenty of traps and false moves to avoid.
The Outlook
US Dollar Basket
The US Dollar basket will be the main driver of US Dollar FX pairs direction.
In the below picture you can see the US Dollar in a second cycle up expecting it to push higher into a third trend.
This then flows into the other pairs we have clear structure developing on...
USD/CAD
USD/CAD - Monitoring for long setup but awaiting confirmation of trend resumption before trigger. We are in a clear LEVEL2 Consolidation expecting a third trend higher.Cycle structure suggests upside but requires additional price action validation. Will update setup status in coming sessions.
AUD/USD
AUD/USD - We can see that the pair is currently in the second zone of consolidation lower. It is also starting to show its hand as it develops LL, LH structure in this timeframe. At the moment we are in a HL Structure looking for the trend to continue lower.
This is in-line with the Dollar Basket pushing higher.
EUR/AUD
EUR/AUD - A beautiful setup on this one. We are in the second consolidation zone higher expecting price to make a third trend, much like USD/CAD is currently positioned.
In summary, this is the last week of the first month of the year, the end of the first month of the quarter. This is a window dressing opportunity for the large market moving firms, so expect difficult trading conditions.
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