This week we saw the USD pullback many of us were expecting. In my weekend analysis form two weeks ago I showed how there were a whole bunch of clues that this was very likely. Most of the majors have now moved to big areas of support/resistance…even on positive USD news with Friday’s NFP figures which revealed that 263k jobs were added to the US economy in the last month. The average hourly wage growth also came in at twice the expected figure. This US labour market resilience could still pay a pivotal role in whether the FED decides to slow down the pace of interest rate increases.
In the other news event, the protests in Chinese around the government’s covid policies, seems to have forced the ruling party to slightly pivot. President Xi Jinping told European Council President Charles Michel at their meeting in Beijing on Thursday, that the less-lethal omicron variant is now the prevalent Covid-19 strain in China. If these statements are confirmed, this would mark the first time Xi has publicly acknowledged that the virus is weakening. It also suggests the leadership in China could be moving toward loosening its strict “Covid Zero” policies. This could support a strengthening of the AUD and NZD especially.
EUR/USD 5min chart showing NFP news;
Why it’s dangerous to trade around big news events.
Let’s have a look at some key charts;
DXY CHART; A break and close below the 200. The next big area of resistance is the 103 level.
Energy & Metal Prices;
Gold; At the key 1800 level now. Looks very bullish to me now. USD weakness will be key for further upside though.
Oil; Formed a double top and broke lower. Looks to be forming a lower high now.
Bitcoin; Still in a tight range. There seems to be a bit of stability flowing back to the crypt market after the FTX disaster.
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