James

1. What are your recommendations on how to trade Forex this summer? What should be the trader's tasks in August? What should we prepare before leaving for holidays?

For me, and for many other traders, trading forex during the summer is much the same as trading during any other time of the year. The currency markets are almost always moving and there are plenty of trading opportunities to take advantage of, whatever time of year it is. That being said, if and when the markets are slow, that is probably the best time to catch up on one's trading education. There are so many opportunities to learn and so many sources to learn from these days. I am a big proponent of ongoing learning, ongoing testing of your systems and strategies, and ongoing practice to hone your skills. So when it gets slow (which it never really does for me), I would definitely say that people should keep trying to learn and practice as much as humanly possible.

2. What book do you recommend us to read this summer?

If you haven't already, I would definitely recommend reading Ashraf Laidi's book, "Currency Trading and Intermarket Analysis: How to Profit from the Shifting Currents in Global Markets". It's a great read and it gives a very unique and sophisticated perspective on trading Forex.

3. What should we do when returning to the markets in September and what is your forecast for the major currencies in Q4?

Well, as I mentioned, I'm always in the markets all year-round for the most part. But if you are going on vacation and returning in September, I would say, "get ready to get back on the roller-coaster!" The forex market is always full of unknowns and you really cannot predict or control market direction, movement, or volatility, however much you may wish to. Each currency will go where it needs to go, when it needs to go, and how it needs to get there. And there’s not one
thing we can do about it, except for read the market to the best of our abilities and react to it in an intelligent manner. Regarding my Q4 forecast, as I mentioned I prefer to react to price action rather than predict price action. But since you asked:

EUR/USD - Though still up as of this writing (right around 1.30), I'm still overall bearish on this pair in the longer-term, and looking potentially to see new lows, at least below 1.20 again.
USD/JPY - Though we are down pretty low as of this writing (right around 87.00), I'm looking for upside on this pair sooner rather than later, potentially above 90.00 and beyond.
GBP/USD - Lots of bullishness on this pair as of this writing (around 1.56), and may still have continued upward momentum. But I'm also longer-term bearish on this one, just like with EUR/USD - If there's a move back below 1.50, the bears should be stepping back in potentially
to target new lows.

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James Chen is CTA, CMT, is the Chief Technical Strategist for FX Solutions. He writes daily currency analysis, leads forex trading seminars, and is the author of "Essentials of Foreign Exchange Trading" and “Essentials of Technical Analysis for Financial Markets". [More about James]