In today’s Market Outlook, let’s take a look at Forex trading on Silver, XAGUSD, NZDUSD, USDCAD, and EURUSD.
We have been following the strength of USD, and the US Non-Farm Payrolls gave the greenback another boost.
If you want to see the recent history of USD strength, check the video from last week:
If you missed it last Friday, the actual number of new jobs was more than double analysts’ expectations.
This is obviously good news for those who found jobs but bad news for those who are waiting for lower interest rates, as now the Fed has less motivation to do that.
We can see the huge effect that the NFPs had on currencies, like this chart on EURUSD.
On the one-hour chart, at least at the time of the production of this video, we have a rising wedge in price action, which is often a bearish signal.
You can look at almost all USD charts, like NZDUSD, and see the same price action:
Big move, then a retracement.
But why not on USDCAD?
We actually did, but price action had already moved the other way.
Regardless, the Canadian employment numbers, which came out at the exact same time as the NFPs, were just as good and missed analysts’ expectations by 8 times so the positive effects cancelled each other out.
If we look at USDCAD on the daily chart, we see a bull run that started over a month ago, but we see price action at a key level.
So, it seems like once per month or so, we get a reversal near the beginning of the month, so we will keep an eye on this.
We see a very overbought stochastic oscillator, so we will keep an eye out for a possible reversal.
We saw similar price action on the precious metals, like Silver.
On the daily chart, we see price action nearing support in a multi-month descending triangle.
All of these pairs will be in focus this week, with tomorrow’s US CPI, which will also give the Fed some idea about interest rates, as these are the best measure of inflation.
Tomorrow, from Ottawa, we have the Canadian interest rate announcement and press conference.
And the same on Thursday with the ECB announcement and press conference.
Looking at all the CAD pairs, we see mostly CAD weakness, but in some cases where price action went against the trend, we could trade the reversal, WITH the trend.
In EUR pairs, we see mixed strength and weakness, so we should have some interesting opportunities tomorrow.
That’s all for now.
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