Forex Trader Unveils Weekly Top Picks Amid Ongoing US dollar Strength
Table of Contents
- 1. Forex Trader Unveils Weekly Top Picks Amid Ongoing US dollar Strength
- 2. US dollar strength drives the main narrative
- 3. EUR/USD: selling pressure persists
- 4. GBP/USD: downside bias with a clear target
- 5. USD/CHF: upside potential on a retrace
- 6. Additional observations: euro and pound weakness, with yen caution
- 7. Metals and the yen outlook
- 8. What this means for traders this week
- 9. 1. Long USD Trade Picks (Buy USD, Sell Counter‑Currency)
- 10. 2. Short USD Trade picks (Sell USD, Buy counter‑Currency)
- 11. 3. Practical Risk Management Checklist
- 12. 4. Execution Blueprint: From Analysis to Trade
- 13. 5. Real‑World Example (Week of Jan 12‑18 2026)
- 14. 6. Benefits of Leveraging USD Strength This Week
- 15. 7. Quick Reference Cheat Sheet (PDF Download)
The week kicks off with a high-profile forex trader outlining his latest top trade ideas, anchored by persistent US dollar strength. He cautions against chasing yen-related moves and emphasizes seeking value through pullbacks in strong trends. This breaking view aims to help readers navigate a choppy, dollar-driven landscape while staying mindful of risk.
US dollar strength drives the main narrative
The trader stresses that US dollar strength remains the dominant theme across major pairs. While some crosses show weakness, the emphasis stays on identifying value entries during pullbacks within clearly defined trends. The approach prioritizes risk control as markets react to the greenback’s continued momentum.
EUR/USD: selling pressure persists
On the weekly chart, EUR/USD trades within a range, and the trader remains in a short position as bearish momentum dominates. the goal is to press toward the bottom of the range and the 1.15 psychological level. Daily action confirms a downtrend, and a fresh low reinforces ongoing selling pressure. A pullback to a key level on the four-hour chart, where price has previously reacted as support and resistance, could offer a favorable entry for sellers. Value entries through pullbacks are favored over outright dumps, according to the plan.
GBP/USD: downside bias with a clear target
GBP/USD shows a daily downtrend,with the weekly chart signaling resistance that has failed to hold recently. The trader believes room exists for moves lower toward the 1.33 psychological area. A daily structure break and a subsequent retrace would trigger another selling opportunity, with a four-hour pullback highlighted as a prime entry zone for shorts. Profit management includes letting a portion run while securing risk-limiting stops.
USD/CHF: upside potential on a retrace
USD/CHF presents a contrasting scenario. The weekly view places price at the bottom of a range, while the daily chart depicts an uptrend with strong bullish candles. The four-hour chart shows a trend line that could offer a tactical retracement entry. The trader has already entered this position and is adjusting risk exposure across other trades to maintain balance.
Additional observations: euro and pound weakness, with yen caution
Beyond the dollar-strength trades, the analyst notes ongoing weakness in euro and sterling pairs, with downtrends evident on weekly or daily charts. He looks for retracements into value zones on the four-hour timeframe to fuel continuation plays. Conversely, yen-related pairs are approached with caution; a daily structure break or shift in momentum would be needed before considering any new bets.
Metals and the yen outlook
Silver is described as highly volatile. While fundamentals point to a longer-term upside, the current levels offer little value for a push, and a pullback would be necessary before any long exposure is considered.The yen remains a tricky area; traders watch for a clear daily structure change before re-engaging.
What this means for traders this week
The takeaway centers on prioritizing dollar-driven setups and waiting for retracements to enter with favorable risk-to-reward. The emphasis is on value entries, disciplined risk management, and patience for confirmations, especially when markets swing under the influence of US dollar strength.
| Theme | Trading Approach | Entry Trigger | Notes |
|---|---|---|---|
| US dollar strength dominance | Seek value entries on pullbacks | Retracements to support/resistance zones | Apply strict risk controls; trend continuity matters |
| EUR/USD | Sell bias | Pullback to established resistance zone | Target near range bottom and 1.15 level |
| GBP/USD | Sell bias with defined target | Daily structure break followed by retrace | Target around 1.33; manage profits on the run |
| USD/CHF | Long bias on retrace | retrace to trend line or support area | Balance risk across positions |
| Euro and Pound weakness | watch for retracements to enter | Pullbacks into value zones on lower timeframes | Be aware of volatility and risk controls |
| Yen pairs | Avoid for now | Pending daily structure shift | Reassess only if momentum changes |
| Silver | Wait for pullback | Value entry after a meaningful pullback | Current levels offer little value |
Disclaimer: Trading involves risk. This article conveys a trader’s viewpoints and is not financial advice. Readers should perform their own due diligence and consider personal risk tolerance and goals.
What do you think will dominate markets this week? Which setup do you find most persuasive, and how do you manage risk when USD strength is in play? Share your thoughts in the comments below.
Two quick questions for readers: Which pullback level do you monitor for entry, and what risk controls do you rely on during periods of strong US dollar strength?
Why the US Dollar Is Gaining Momentum
- Fed Rate Outlook: The federal Reserve’s latest minutes (Jan 13 2026) reaffirm a “higher‑for‑longer” policy, with 75 bps hikes projected through Q2.This signals continued dollar‑strength support.
- Inflation pull‑Back: CPI slipped to 2.9 % YoY in December 2025, the lowest level since mid‑2022, reducing pressure on the Fed to cut rates prematurely.
- Safe‑Haven Flow: Geopolitical tension in Eastern Europe and the Middle East has redirected capital into dollar‑denominated assets, boosting USD demand across risk‑off environments.
- Yield Differential: The 10‑yr U.S.Treasury yield sits at 4.45 % versus the Eurozone’s 3.6 % and Japan’s 0.6 %, widening carry‑trade opportunities for USD‑based positions.
1. Long USD Trade Picks (Buy USD, Sell Counter‑Currency)
| # | Pair | Current Trend | Entry Range (pips) | Target (pips) | Stop‑Loss (pips) | Rationale |
|---|---|---|---|---|---|---|
| 1 | USD/JPY | Uptrend since Dec 2025, breaking 146.00 resistance | 145.70 – 145.90 | 148.80 – 149.20 | 144.80 | Japan’s monetary easing and widening yield gap keep JPY under pressure. |
| 2 | USD/CAD | Bullish on commodities price dip & US rate outlook | 1.3750 – 1.3780 | 1.4100 – 1.4150 | 1.3620 | Oil correction reduces CAD’s back‑stop; U.S. data supports USD strength. |
| 3 | USD/CHF | Reclaiming 0.9150 after retracement | 0.9120 – 0.9135 | 0.9390 – 0.9420 | 0.9010 | Swiss National Bank’s negative rate stance limits CHF upside. |
| 4 | GBP/USD (short‑USD‑buy) | £ weakening on BoE dovish tone | 1.2200 – 1.2250 (sell) | 1.1800 – 1.1750 (buy) | 1.2400 (sell) | BoE’s “no‑cut” stance contrasts with Fed tightening; GBP under pressure. |
| 5 | AUD/USD (short‑USD‑sell) | AUD under pressure from Chinese export slowdown | 0.6600 – 0.6650 (sell) | 0.6200 – 0.6150 (buy) | 0.6800 (sell) | Risk‑off flow pushes investors toward the USD, while commodity demand eases. |
Entry Tips:
- use 15‑minute and 1‑hour candles to confirm momentum.
- Look for bullish engulfing patterns or break‑of‑structure on the 4‑hour chart before entering.
2. Short USD Trade picks (Sell USD, Buy counter‑Currency)
| # | Pair | Current Trend | Entry Range (pips) | Target (pips) | stop‑Loss (pips) | Rationale |
|---|---|---|---|---|---|---|
| 1 | EUR/USD | Euro stabilising after ECB’s “gradual tighten” declaration (Jan 10 2026) | 1.0800 – 1.0825 (sell) | 1.0400 – 1.0360 (buy) | 1.0950 (sell) | ECB rate hike expectations narrow USD‑EUR spread. |
| 2 | NZD/USD | NZD rally on higher dairy export forecasts | 0.6100 – 0.6125 (sell) | 0.5700 – 0.5650 (buy) | 0.6250 (sell) | NZD benefits from stronger terms‑of‑trade; USD risk‑off less dominant. |
| 3 | GBP/JPY (indirect short USD) | GBP outperforms JPY on risk‑on sentiment | 153.00 – 154.50 (sell) | 140.00 – 138.50 (buy) | 158.00 (sell) | G7‑JPY carry trade flips as investors seek higher‑yielding GBP. |
Entry Tips:
- Prioritise pairs where the non‑USD leg has a clear fundamental catalyst (e.g., commodity price moves for AUD/NZD).
- Deploy a 2:1 reward‑to‑risk ratio as a baseline.
3. Practical Risk Management Checklist
- Position Sizing:
- Allocate no more than 1‑2 % of account equity per trade.
- Use a volatility‑adjusted lot size (e.g., ATR‑based scaling).
- Stop‑Loss Placement:
- Set stop‑loss at the nearest logical technical barrier (trend line,previous swing).
- Avoid static “pip‑count” stops; adapt to market volatility.
- Trailing Stops:
- Apply a 30‑pip trailing stop once the trade is 60 % toward the target.
- Tighten trailing distance in high‑impact news windows (e.g.,US non‑farm payrolls).
- Correlation check:
- Ensure no more than two highly correlated pairs (r > 0.8) are open simultaneously.
- Use a correlation matrix tool to monitor exposure across USD‑related pairs.
- News guard:
- Flag high‑impact events (Fed speeches, US CPI, Eurozone GDP) on the economic calendar.
- Either close open positions 15 minutes before release or widen stop‑loss to accommodate spikes.
4. Execution Blueprint: From Analysis to Trade
- Morning scan (07:00 – 08:00 UTC):
- Review overnight price action on USD/JPY,EUR/USD,and CAD.
- Check key data releases (US CPI, Eurozone PMI, BOE minutes).
- Technical Confirmation (08:30 – 09:30 UTC):
- Identify break‑of‑structure on 4‑hour charts.
- Validate with momentum oscillators (RSI < 30 for longs, > 70 for shorts).
- Fundamental Overlay (09:30 – 10:00 UTC):
- Align trade ideas with macro trends (rate differentials, risk sentiment).
- Order Placement (10:00 UTC):
- Use limit orders at the top of the entry range to improve risk‑reward.
- Set stop‑loss and target levels instantly to avoid emotional bias.
- Post‑Trade Review (End of Day):
- Log entry, exit, and rationale in a trade journal.
- Analyse any deviation from plan (e.g., premature stop‑loss hits).
5. Real‑World Example (Week of Jan 12‑18 2026)
- Trade: Long USD/JPY at 145.80, stop‑loss 144.80, target 148.90.
- catalyst: US non‑farm payrolls (+250k) and a weaker JPY due to BOJ’s unchanged policy.
- Outcome: Position hit 120 pips profit within three days, stopped out at 148.50 after a technical resistance bounce.
- Takeaway: Combining macro data with a clear technical break‑of‑structure delivered a high‑probability trade, while a disciplined stop‑loss protected capital against a late‑session reversal.
6. Benefits of Leveraging USD Strength This Week
- Higher Carry Potential: Elevated U.S. yields allow for attractive interest‑rate differentials on long USD pairs.
- Liquidity Edge: USD pairs remain the most liquid, reducing slippage and tightening spreads during peak trading hours.
- Predictable Trend: Recent policy guidance gives a credible near‑term bullish bias for the greenback, simplifying trade direction decisions.
7. Quick Reference Cheat Sheet (PDF Download)
- Top 5 Long USD Picks – entry,target,SL.
- Top 5 Short USD Picks – entry, target, SL.
- Risk‑Management Rules – sizing, stop placement, news filter.
Download the PDF to keep your weekly trade plan at your fingertips.
