This week both the Euro and Yen have major releases that will affect those currencies:
- Euro Minimum Bid Rate and ECB Press Conference, Thursday at 7:45am and 8:30am New York time
- Bank of Japan Policy Rate, Monetary Policy Statement, BOJ Outlook Report and Press Conference (late Thursday into Friday morning)
Typically leading into major releases like these, the currencies can stall making them harder to trade. However, there are other currencies available. For example the AUDUSD is forming a reversal bar on the daily with the Stochastics on the daily and weekly oversold. Although it may not be a trend reversal pattern, price will, more likely than not, retrace up to find a point of resistance. The likely resistance area will be either the daily or weekly ATR (plus sign on the charts).
Another currency to watch is the USDCHF. Both the daily and weekly are overbought. Although markets can continue up for extended periods, you could watch for a reversal bar on the daily chart to form indicating a retracement is likely to begin. There are two options for trading the USDCHF at that point. A countertrend trade down to a support area and a trend entry once price finds support.
Another currency to watch is the USDCAD. The daily is overextended on the Stochastics with the weekly just now turning up. This indicates that the USDCAD may retrace to find support but will likely continue up afterwards. The likely area that price will find support is the ATR on the daily chart. A trend trade would occur if price finds a support area and the expectation is that price would take out the previous high (probably 1.2864) if the retracement begins today.
Of course, the critical component to trading these currencies will be the reversal bars. If you do not understand reversal bars or need a refresher, then join the free Why You Need to Learn How to Read Candlestick Patterns webinar tomorrow at 11am New York Time.