Trade Set-Ups Being Watched for Week of May 19

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Forex Trade Set-Ups Being Watched for Week of May 19

Friday May 16 has been a pretty quiet day (so far), but that may set up some good trades next week. Here are some trades I have on, as well as a few set-ups I am waiting for. These are swing trades in the forex market, so I am using stops and targets. Trades are expected to last for several hours to possibly several days.

AUDUSD

I went long in the AUDUSD yesterday based on a long-term rising trend, and the pair recently broke higher out of a short-term downward sloping trend channel (within the longer-term trend). I am long near the bottom of the current consolidation. This is a trend trade, so expecting the price to move higher. Once (if) it breaks above this current consolidation we could see some quick sharp moves.

AUDUSD 4-Hour Chart

EURGBP

The price is currently near the low of a downward trend channel so I will wait till the price reaches the top of the channel before looking to go short. Blue line marks the potential short entry (may be adjusted slightly), the line above is the stop and the line below the target placed about half way into the channel. The concept here is simple–trade the channel but take the short trade at a resistance area (other example explained here: Are You Giving Yourself Enough Running Room on Trades?)

EURGBP 4-Hour Chart

EURJPY

The EURJPY broke out of a triangle pattern to the downside, and has been trending lower since. I am waiting for a pullback (higher) to get short. This pair typically sees deep retracements so I have a short order waiting just below a prior pullback peak in the downtrend. If the price keep dropping and we get a pullback peak below the entry point, then the order will need to be moved down below the last peak (yet to be seen).

I let the market come to me, I don’t chase trades. If I can’t get a trade where I want it, then I don’t take it.

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EURJPY 4-Hour Chart

GBPJPY

The EURJPY and GBPJPY are highly correlated, but will have different set-ups since they don’t move exactly the same. The GBPJPY was moving in a channel lower but has broken through it on aggressive selling a few days ago. The start of that aggressive selling is likely to be a strong resistance area, and it is also very close to the channel top. Therefore, I have placed a sell order right near the start of the big drop we saw a few days ago. Stops are above a recent high, and targets down near the original channel low in anticipation of the downtrend continuing.

GBPJPY 4-Hour Chart

Final Word

On this time frame( 4-hour and 1-hour charts), I spend about 20 minutes a night going through about 15 to 20 forex pairs and looking for these types of setups. I put out lots of orders, and don’t focus on any one particular trade. Less than 1% of my account is risked on each. On a given day I will usually be filled on 5 of these trades, so if one or two don’t work out, the other three or four that do make it up for it. In other words, diversify a little bit with this style of trading. There is very little time or effort required, so put out orders when you see a setup. Don’t find one trade, trade it and pray it works out. With trades like this you have an edge, but like a casino that edge shows over a great many trades. It is very easy to lose one trade even with a great edge, but if you take a lot trades that have an edge, it becomes very hard to lose overall. All targets are at least 1.6 times the risk, making winners bigger than losers.

Brexit: What trade deals has the UK done so far?

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Following Brexit, the UK is free to strike new trade deals for selling goods and services around the world.

The government is also beginning negotiations for a new trade agreement with the European Union (EU).

So, what is free trade and what deals has the UK already done?

What is a free trade deal?

A free trade deal aims to encourage trade – usually in goods but sometimes in services too – by making it cheaper. This is often achieved by reducing or eliminating tariffs – charges for trading across borders.

Trade agreements also aim to remove quotas – limits on the amount of goods that can be traded.

Trade can also be made simpler if countries have the same rules, such as the colour of wires in plugs. The closer the rules are, the less likely that goods need to be checked.

Where does the UK trade?

% of total UK trade in 2020

So why have tariffs and quotas at all?

While free trade agreements aim to boost trade, too many cheap imports could threaten a country’s manufacturers.

In order to protect local car makers, for example, a country could impose tariffs on vehicles from other parts of the world.

Why does the UK need an EU trade deal?

The UK will need an agreement with the EU to stop new tariffs and other trade barriers coming into force after the transition period ends on 31 December 2020.

During the transition period the UK will remain part of the EU’s trading arrangements – the single market and the customs union. That means no tariffs, quotas or checks will be introduced.

The point of the transition is to give both sides some breathing space while a trade deal is negotiated, and to give businesses time to get ready.

If any trade deals are reached, either with the EU or other countries, they will not start until the transition period ends.

What about a Canada-style deal?

Prime Minister Boris Johnson has spoken in favour of an EU trade agreement that builds on the deal that Canada has.

Tariffs on most Canadian goods, such as machine parts, have been eliminated. However, there are some additional checks, such as customs and VAT.

Services, like banking, are much more restricted.

The financial sector is important to the UK economy – so getting a deal in this area will be a priority.

How easy will it be to negotiate a UK-EU trade deal?

Neither side wants tariffs and quotas – so that part of the trade deal could be straightforward.

But getting agreement around rules and regulations could be much tougher.

The UK and the EU currently share the same rules in areas like workers’ rights, competition and environmental policy – they’re known as level playing field rules.

But in a recent document outlining the UK’s aims, the government said: “we will not agree to any obligations for our laws to be aligned with the EU’s”.

However, the EU insists that the UK must stick to the rules – so UK businesses don’t gain an advantage.

Even if a trade deal is agreed, it will not eliminate all checks because the EU requires certain goods (such as food) from non-EU countries to be checked.

What happens if UK-EU trade talks fail?

If negotiators fail to reach a deal, the UK faces the prospect of trading with the EU under the basic rules set by the World Trade Organization (WTO).

If the UK had to trade under WTO rules, tariffs would be applied to most goods which UK businesses send to the EU. This would make UK goods more expensive and harder to sell in Europe.

Having WTO terms would also mean full border checks for goods, which could cause traffic bottlenecks at ports.

And the UK service industry would lose its guaranteed access. Qualifications would no longer be recognised and it would be much harder for workers to travel to the EU.

This would affect everyone from bankers and lawyers, to musicians and chefs.

What trade deals has the UK done so far?

While it was an EU member, the UK was automatically part of around 40 trade deals the EU had struck with more than 70 countries.

The UK has been trying to copy these arrangements. So far, 19 such deals, covering 50 countries or territories, have been rolled over. These deals represent just over 8% of total UK trade.

The following deals are expected to take effect at the end of the transition period, according to the Department for International Trade:

  • Kosovo (£8m of trade in 2020)
  • Jordan (£448m in 2020)
  • Morocco (£2.5bn in 2020)
  • Georgia (£123m in 2020)
  • Southern African nations (£10.2bn in 2020)
  • Tunisia (£542m in 2020)
  • Lebanon (£762m in 2020)
  • South Korea (£14.8bn in 2020)
  • Central America (£1.1bn in 2020)
  • Andean countries (£3.4bn in 2020)
  • Caribbean countries (£3.7bn in 2020)
  • Pacific Islands (£163m in 2020)
  • Liechtenstein (£146m in 2020)
  • Israel (£4.2bn in 2020)
  • Palestinian Authority (£41m in 2020)
  • Switzerland (£32.4bn in 2020)
  • The Faroe Islands (£252m in 2020)
  • Eastern and Southern Africa (£2bn in 2020)
  • Chile (£2bn in 2020)

The government says it is still in negotiation with a further 16 countries, including Canada and Mexico.

Interactive meetings calendar

By default this page lists all meetings of WTO committees and councils as well as events taking place at the WTO such as book launches, workshops and seminars. You can apply a filter to show or hide meetings for individual bodies and types of event. You can save your settings on your machine so the calendar retains your customization.

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