Monday Market Watchlist 16/03/2020

*An update on what I am trading and what I am looking to trade this week*

Happy Monday to you all! I hope your weekend was as relaxing as my own and you gave your brain and eyes a rest. As always, I will reiterate that it is important to take time away from the financial markets and the price charts. This is even more important when the markets appear to not be functioning properly and volatility levels are high.

If you are looking for some ways to kill time and expand your mind, click on the link below to check out all of my trading/finance book suggestions!

Let’s get right in to it and I will show you the 3 financial instruments I am looking at trading over the next few days and weeks.

US Crude Oil

US Crude is still showing signs of buying around the $30 bbl and I think this level could hold over the next week. With the news of more travel bans coming in to place across the globe, the price of Crude has actually not reacted massively and price is still hovering around this support zone.

Over the past few weeks the price of crude has dropped over 55% and this represents a huge discount. Demand has dropped because of corona virus and airlines cancelling flights and people quarantining themselves and this along with the failed supply cut deal from Saudi Arabia and Russia has caused this. When demand eventually returns (which it will) then I believe the potential returns from buying crude oil now could be significant.

$28.50 price level is the main lows of support at this area. If the daily/weekly timeframe chart closes below this level then we could see a further sell off but if this price holds then long term I think it is a safe bet to buy Oil.

USDCAD FX Currency Pair

USDCAD has been overbought on the daily timeframe for some time now. It is very over extended and expanding outside of many “mean” ranges. I thought the 1.38 price zone could show some selling action last week and it did but it was very short lived.

Technically the US dollar should be selling off massively with rates cut from near 2% down to effectively zero % this weekend. For this reason I am still looking to short this FX currency pair. As it stands, there is now a very clean example for a head and shoulders reversal pattern forming on the lower timeframe. This is shown on the chart above.

This trade set up is similar to the very successful Spot Gold short trade last week which you can view by clicking on the link below.

GBPJPY FX Currency Pair

The Pound has been in free fall since around the 20th February with no slowing down in sight. The lower timeframe chart shown above has the 50 and 200 EMA in a bearish alignment and price is making strong lower highs and lower lows every day. For this reason I am not looking to buy the Pound vs Yen at the moment.

The next major support zone I have is around 127.00 and this is where I will look for the first signs of a reversal. Until then there is little to stop price from falling more except from a major fundamental/economic breakthrough. Lowering interest rates to support the economy has only added to the Pound weakness last week.

The higher timeframe daily chart above shows the 127.00 support zone which provided a good buying opportunity towards the end of summer last year. If this zone holds strong again then once again I will look to buy but until then, I think selling any pullbacks is the smarter move.

End Note.

Be patient and be smart! Market volatility is high right now and tight/aggressive stop losses that might normally work will not work right now. You will lose money if you are trying to trade these markets in the same way as you have been over the last year or 24 months.

Remember to look at the higher timeframe price charts to find stronger levels for price. This will increase your chances of success.

Useful Links:

All my technical analysis is done using the TradingView platform. You can get access via the link below.

My preferred broker of choice is IC Markets. Low spreads and trading costs really help long term profitability. A link to their site is below.

FTMO Trader Funding Programme.

Thanks for reading and please don’t forget to LIKE, SHARE and FOLLOW my blog to stay up to date with the latest market analysis and trading education posts.

DISCLAIMER: None of the information posted on this site is to be considered investment/financial advice. Trading is high risk and you should only trade with money you can afford to lose.

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