Planning on trading the U.S. NFP release?
Here’s a simple trend retracement setup I’m watching on a dollar pair.
Before moving on, ICYMI, yesterday’s watchlist checked out GBP/USD’s break and retest setup ahead of a U.K. market holiday. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
U.S. Challenger job cuts fell by 15.8% in May
U.S. ADP non-farm employment change rose by 128K vs. 295K forecast
OPEC agreed to boost production by up to 650K barrels per day
U.S. initial jobless claims at 200K vs. 210K consensus, 211K previous
U.S. factory orders rose by 0.3% vs. expected 0.8% gain
EIA crude oil inventories fell by 5.1M barrels vs. estimated 3M drop
German trade surplus widened from 3.2B EUR to 3.5B EUR vs. 5.6B EUR forecast
Upcoming Potential Catalysts on the Forex Economic Calendar:
Chinese and U.K. markets closed for the holidays
U.S. non-farm payrolls report at 12:30 pm GMT
U.S. ISM services PMI at 2:00 pm GMT
FOMC member Brainard’s speech at 2:30 pm GMT
U.S. President Biden’s speech coming up
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: AUD/USD
With the U.S. NFP report projected to show slower jobs growth in May, I’m looking at this potential short dollar play on AUD/USD.
The pair has been trending higher for the past few weeks, and it looks like another test of its ascending trend line is in the works.
In particular, the 61.8% Fibonacci retracement level that lines up with a former short-term resistance and the .7200 major psychological mark might be a prime spot for buyers to jump in.
After all, technical indicators appear to be in favor of a continuation of the climb. The 100 SMA is above the 200 SMA to suggest that the path of least resistance is to the upside, and the 100 SMA is near the area of interest to add to its strength as a floor.
At the same time, Stochastic is nearing the oversold region to signal exhaustion among sellers soon. If buyers take advantage, support levels could hold and send AUD/USD back up to the swing high and beyond!
If you’re planning on trading this one, just make sure you stay extra vigilant during the NFP release since dollar pairs tend to make huge swings then.
