In today’s live trading session, we went over our predictions for the NFP release and consequently, trade setups for the week.
A new month is approaching and that means another NFP week. The current forecasts speculate the unemployment rate to drop from 8.4% to 8.2%. This should result in a stronger US Dollar as the unemployment rate has continued to decrease for each consecutive month. Based on current technical analysis, we are bullish on the US Dollar Index (DXY) as price is using last week’s low as support.
Now that we have a bias for the US Dollar, it’ll be much easier to determine biases for the Forex currency pairs. One pair we expect to continue its selloff is EURUSD. We had a profitable short for this pair last week and have held a small position since then. Then we have GBPUSD, which is a pair that should resume its downtrend this week. We are waiting for price action to confirm the next leg down.
Generally, the NFP forecasts have a 50% chance of being right or wrong. It’s best for traders to use other cues to determine a possible result. Based on technical analysis and the consecutive months of decreasing unemployment, we believe this week’s result will be bullish. Let’s have a great trading week. As always, be safe and trade responsibly!
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