TST NEWSLETTER – 06/06/2021
Dollar Slumps Again
Topics:
- Dollar Slumps Again
- Last Week In The Forex Markets
- Top 3 Pairs For Next Week
- The Social Traders Free Training Video
Dollar Slumps Again
What Are Nonfarm Payrolls?
Nonfarm payrolls are the measurement of the number of workers in the U.S. This excludes farming/agricultural workers and other workers in classification roles. This is tracked and measured by the Bureau of Labor Statistics, the survey and work to gather payroll data throughout the U.S.
Friday 4th of June 2021, saw the release of the monthly Non Farm Payrolls.
It was expected that we would see a figure close to 650k.
559k being the true figures released, leaving many Dollar bulls down and highly exposed.
The US wants to see higher figures, more people in employment means more people spending in the economy, adding to what we know to be a healthy sustainable economy, which people like to invest in.
Canada's situation has declined too, analysts predicted a -20k loss to jobs, but the real figure shows this to be -68k.
Since May 2021, the DXY has dropped almost -2% and is not looking promising for the future, if we continue to see uncertainty in the US economical domain we may see several investors go elsewhere for their portfolio growth, this we have already seen by some big names in the industry.
Not all reports were doom and gloom for the US, we saw better than average earning, which did better than previously outlooked by analysts, beating monthly and yearly earning's. However, this leaves a bad taste in investors mouths, not knowing which way their investments will be going, or for that matter is in the next 10 years.
We can see on this graph that many US citizens lost their jobs at the start of the pandemic, we then saw a huge return to work scenario with the pandemic not fully being realised as a threat to society.
However, with the spread of the pandemic, combined with peoples fears, has affected the economy with older workers not returning to work and younger people retraining into other sectors or quitting completely.
In turn, causing the working men and women to either lose jobs or not feel safe enough to work their everyday jobs.
As we are seeing mixed views in the UK with how the pandemic was handled, the same narrative must be projected worldwide, seeing if the governments did all they could to protect, serve and do justice to the people they ever so rely on to run the economy.
All we can do as traders is try to predict and learn from the outcome of these events.
The NFP releases are notorious for being a market mover, let's just try and stay on the right side of the moves as best we can. We should also be wary of inflation data set to release next week.
Last Week In The Forex Markets
Volume, volume, volume!
The markets have been giving to us this week, with some moves on the DXY, we have been able to get our hands dirty, capitalizing on the reintroduction of liquidity.
Lets delve into what we where up to last week here at The Social Traders.
GBPUSD: [+22.8%]
This setup was shared with our Pro Members.
GBPUSD gave us a textbook setup, which played out to perfection.
Here we have an ascending wedge, we can see that price action has pushed up breaking the previous major high.
We did in fact miss the entry right at the top, we tackled this problem by looking for an entry on a pullback to the order block which caused the break of low (BOL).
Our profit taking region was back to the 90% rule, being the bottom of the ascending wedge.
USDCAD: [+2.5%]
USDCAD has been an unpredictable pair to trade as of recently, giving us lots of sideways of moving price action.
But we where keen to catch the setup we had eyed up.
We can see that price action is falling in a wedge pattern, we were looking to trade the change of momentum.
Entering this trade we saw a nice and quick push away from our entry, the markets came up and simply came back down rapidly. To avoid a BE we decided to close this trade early with 2.5%.
In turn this was simply just a swing low being printed before this trade continued.
Adaptions we could've made would be to aim our profit target regions to the previous high, but with how the markets have been recently we were happy to bag 2.5% on top of GU.
EURUSD: [Missed]
EURUSD offered us an awesome setup from a technical standpoint, unfortunately, we missed this setup by a few pips.
Price action has been rather bullish on EURUSD since April, with some large pullback in the process, we were simply looking to trade that.
This pair has been moving side ways for two/three days before we saw that push back up toward the previous high (contained an order block)
Simply we were looking to trade the momentum change but we just didn't get that entry we wanted.
As we can see the markets came to our area, tapped the order block and ran immediately.
This was a quick momentum change and could have been resolved with the use of a limit, BUT this could have gone either way so was better to manually enter.
Top 3 Pairs For Next Week
USDCAD: [Long]
Every Saturday we send a 'Market Breakdown' to our Pro Members.
This week we have some super high-quality setups to share with you guys, with that liquidity returning we will be looking to capitalise.
Price action has been descending in a wedge pattern.
Price has broken out of the structure, we are simply looking to trade the cause of this break, that being the order block that caused the break of high.
We predict the price to fall back into our area, somewhat correctively, this will allow us to examine price action and look to get an entry off the order block in play.
GBPUSD: [Long]
Next week is looking great for most pairs across the board.
On this setup we are anticipating a pull back into the area marked out.
This will give price action a cause for higher prices, this also was confirmed with the break of high (BOH).
This will give cause the 'Equilibrium' where buyers and sellers are happy with the price.
Once that is established we are expecting the price to have a momentum change. In turn, sending the price to the downside, giving us a tasty setup.
Price action will be watched carefully around this area to get an entry, we will want to see any confirmation candles or exhaustion in price action.
GBPCHF: [Short]
Finally for our outlook for next week, we are looking at GBPCHF.
This pair was highlighted in our market break down for Pro Members.
Here we have used pattern separation to identify the direction.
We can see that price action has broken a previous low, we have then used a channel to give us the chance to take a sell position.
The setups come from the order block in play, we will be looking for a price to tap the order block before gaining the momentum it needs to continue its overall bias.
The Social Traders Free Training Video
This week we thought we would treat our free members to a free training video.
Here we will be covering 'discretion', now this is a subject all traders should take notes on as Dylan will explain in the free training video below.
We plan on doing more like this so be sure to let us know what you guys think and if you would like to see more of these!
Want to learn exactly how we trade the markets?
Why not check out our ‘pro package’? You will gain access to our in-depth course as well as many more features – www.thesocialtraders.com
Looking for a reliable broker with raw spread accounts and 1:500 leverage? Try our partnered broker – https://www.axitrader.com/uk/live-account?token=IDUZ-LFrugU5oKniM-HhFmNd7ZgqdRLk&affid=7138
We thank you for reading this week's addition to the TST Newsletter, have a great trading week, and stay consistent. – 'The Social Traders Team'
Written by – Karl Milward