In today’s GCI Market Outlook, let’s take a look at Forex trading on USD/JPY, NZD/USD, EUR/USD, GBP/USD, AUD/USD, USD/CHF, Silver, XAG/USD, and Gold, XAU/USD.
OK, today’s video is going to be a little different, as something happened, and you all need to see it.
I am always talking about letting economic news drive price action against the trend, into a technical setup, and then trading WITH the trend.
Well, last week’s US Non-Farm Payroll gave us the perfect setup. Let’s take a look.
The announcement came out a day early, as Friday was a holiday.
The forecast was for 114,000 new jobs, but the Actual figure came out at exactly half that figure, which was a huge miss to the downside.
This type of miss, in any economy, will make its currency weaker because the central bank will not want to raise interest rates with employment falling.
So, here we see the reaction as USD went weaker in every case, and I took screenshots of most pairs last Thursday and sent them out to my students.
Gold, where price action rose to touch the upper trend line and the stochastic oscillator passed over 80 to be very overbought.
Silver, the same.
NZDUSD, AUDUSD, GBPUSD, USDCHF, and EURUSD, which didn’t quite make it to the upper trend line but is clearly in a bear run.
I also told everyone to wait until Monday, as Friday was a holiday in the US, and not to open a position until we get confirmation.
Again, we want to trade WITH the trend.
So, what’s the latest?
This is what I call the News Catalyst Fade.
The News Catalyst Fade is a reversal setup where a major news event drives price into a key technical level, such as a trend line, and the trade is taken when price rejects that level and reverses back in the original trend direction.
Remember, the trend is your friend.
We got confirmation on a few pairs, and we are still watching and waiting on the rest.
So, Gold on the daily chart: a short on Monday morning and you would have been in profit quite quickly.
On the 30-minute chart, we can see this quite clearly.
Silver, same thing.
It’s now Tuesday, and not all FX pairs have reversed yet, but we saw success with USDJPY, NZDUSD, and USDCHF.
This morning, AUDUSD looked like it might capitulate, but we may have to wait on this one.
Let’s catch up in a couple of days.
Source: Original Article
