To properly examine the likely outcome of the Labour data release and the NFP (Non-farm Payrolls), I will be correlating the USD with the value of gold. That said, gold is at a critical juncture as the US Dollar strengthens and Treasury yields rise. The week has been marked by risk-off sentiment due to Fitch’s downgrade of the US sovereign debt credit rating. Investors are concerned about increasing US debt and higher borrowing costs. The benchmark 10-year note is climbing towards 4.20%, and the short end of the curve is stable as the market believes the Federal Reserve is nearing the end of its tightening cycle. Despite these headwinds, gold has held up relatively well, but its performance may be undermined if the challenges persist.
US Dollar – D1 Timeframe
The US Dollar recently bounced off the pivot zone at the bottom of the equidistant channel and has returned to the 50 and 100 moving averages. In this case, the moving averages are expected to act as a resistance and push prices back down, together with confluences from the rally-base-drop supply zone, resistance trendline, and the bearish moving average array. I will still be looking forward to a rejection from that zone to confirm the onset of the bearish movement.
Analyst’s Expectations:
- Direction: Bearish
- Target: 100.132
- Invalidation: 103.539
EURUSD – D1 Timeframe
EURUSD, on the daily timeframe, has just bumped into the 50 and 100 moving averages right on top of the 76% of the Fibonacci retracement tool and trendline support. These are expected to provide the much-needed support that would push prices back up toward 38% of the Fibonacci tool, at the very least. In any case, a lot is yet to be seen as we await the data from the US later today.
Analyst’s Expectations:
- Direction: Bullish
- Target: 1.10845
- Invalidation: 1.08294
GBPUSD – D1 Timeframe
GBPUSD has recently been rejected off the demand zone at the trendline support. We also can see that the moving averages are arrayed clearly bullishly, indicating that we are still in an uptrend. The final confluence here is that the 50-day moving average is the pivotal support level in this case, which is expected to push prices back up to the highlighted supply zone. In any case, due diligence must be done to screen out your entry scenario.
Analyst’s Expectations:
- Direction: Bullish
- Target: 1.28247
- Invalidation: 1.25872
CONCLUSION
The trading of CFDs comes at a risk. Thus, to succeed, you have to manage risks properly. To avoid costly mistakes while you look to trade these opportunities, be sure to do your due diligence and manage your risk appropriately.
