In today’s live trading session, we went over the results of the US unemployment claims and then completed analysis for the Dollar Index to determine the direction of the majors.
This morning the US economy printed a result of 1.314 million job claims versus the forecast of 1.375 million. Although this may not seem like a big difference, the Forex markets sure had a reaction to it. We saw many of the majors give back the gains it made against the Dollar. Gold fell from 1815 to the 1800 psychological level. Pairs like EURUSD and GBPUSD seemed to have melted as soon as they reached June’s highs. This is now the third fundamental result in a row in favor of the US Dollar. First, it was the NFP numbers, then it was the manufacturing data, and now the unemployment claims. The bulls are back, but for how long?
After this morning’s news release, we identified some key setups that can be entered given that the Dollar remains its prowess. GBPUSD has touched and rejected its June high of 1.26700 in a swift manner. This could be indications that the Greenback is overextended and is due for a retrace or reversal. Another setup of potential interest is a short for CADCHF. This pair had recently completed a bearish flag pattern and all that is required for entry is the clearance of the previous low. We have a bearish bias for CADJPY as well with the same requirements.
Many traders have noticed the recent choppiness and irregularity in the markets which has definitely affected some of our trades. We look to minimize the trades we take until this segment of the market passes. The current situation can be attributed to many factors, but it seems the most glaring is one is the uncertainty of reopening economies amidst growing cases of Covid-19. We hope this period of trading is looked upon as a valuable experience for when such conditions do return in the future. As always, be safe and trade responsibly!
Directory:
- Sign up for a Free Membership.
- Login to watch full recorded webinars in our Forex Trading Room.
- Chat with our traders in the Community Discord Server.
- Read yesterday’s breakdown: Beware of Smokescreens + AUDJPY Short Setup
- Get the VIP Membership with code FIRST50 at checkout for 50% Off your 1st month
- 14 Day Risk-Free Trial
