Top Trade Ideas - November 27th

A new week starts and sets up the final tone for November. All markets scanned and prepped.

Last week was pretty quiet in equity markets, as the Thanksgiving Holiday meant markets were closed for a day and a half. However, the S&P 500 is still on track for one of the best November gains on record.

In G10 FX, we finally had a quieter week, particularly with many off over Thanksgiving and the long weekend. The USD traded broadly flat, with GBP the surprise outperformer. We watch out for EU and US inflation gauges on Thursday.

FX

The potential of a double top in USD/JPY around 152 will be tested next week, as the wedge forming (shown below on the 2-hour candles) will lead to a breakout.

A pop higher above 149.75 does put the medium-term uptrend back in vogue, with 152 the logical next resistance level. However, if we get a break lower than 147.30 from last week, it looks achievable. Either way, there’s a 200-pip move to be harvested from either direction for a patient trader.

TRADE IDEA - TRADE THE BREAK ON USD/JPY

Entry: long from 149.85 or short from 149.25, targeting 151.90 or 147.30. Manage risk with stop losses set at either 2:1 or 3:1 R/R

We flag up an interesting setup on the daily candles with EUR/GBP. Last month, we went long the pair on a break above the red line at 0.8700. Although we ended up getting stopped out flat, the pair has been trading more in line with a trend channel instead of using the 0.8700 pivot as a key support.

The kick-up in GBP crosses on Friday has put EUR/GBP right at the bottom of the trend channel. We feel this provides us with a good long entry point. GBP looks a little rich here, and if you ask us which currency we’d prefer to hold through to year-end, we’d say EUR.

Having a tight stop in case this trend breaks down gives a good risk-to-reward play of over 4:1.

TRADE IDEA - TREND BOUNCE BACK FOR EUR/GBP

Entry: 0.8670

Take Profit: 0.8780

Stop Loss: 0.8645

Our full Monday rundown covers more FX before turning to equity and commodity markets. All our ideas in today’s post, plus complete articles released on Wednesday and Friday, can be accessed by becoming a premium subscriber.

Onto the rest of the trade plan.