Gold and the Majors ahead of the NFP

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Let's dive into the latest developments shaping the global economic landscape. Good news first: the threat of an unprecedented US debt crisis has receded, as US lawmakers passed a bill to raise the debt ceiling and avoid a catastrophic default. Phew! But don't pop the champagne just yet, because storm clouds are still looming. High inflation, rising interest rates, and sluggish growth are challenges that have yet to disappear. Economic growth in the US and China, the world's top two economies, shows signs of stuttering. China's recovery is losing steam, impacting Germany's hopes for an easy exit from its downturn. A slowdown in Europe's largest economy spells trouble for the rest of the region, which narrowly avoided a recession earlier this year. Inflation remains uncomfortably high, prompting central banks to consider further interest rate hikes. These developments have the potential to weigh on consumer spending and business investment. Buckle up, folks, as we navigate these uncertain times and keep a close eye on their impact on forex markets. Stay informed and trade wisely!

US Dollar - Daily Timeframe

UsDollarDaily-0106.png

The US Dollar on the daily timeframe has finally given the first signs of rejection from the supply zone, as highlighted above. The additional confluence from the resistance trendline and the descending array of the moving averages seems to lend even more credence to the possibility of a bearish price action on the US Dollar chart.

Analyst’s Expectations: 

Direction: Bearish

Target: 102.75

Invalidation: 104.71

XAUUSD - Daily Timeframe

 XAUUSDDaily-0106.png

More often than not, Gold tends to correlate inversely to the price of the US Dollar. Based on that fact, we can naturally expect a bullish price action from Gold. Now, let’s combine that with the available confluences we can see from the chart above:

  • The 100-Day moving average support
  • The support trendline of the rising channel
  • The bullish array of the moving averages

Overall, the stars seem readily aligned in favor of bullish price action.

Analyst’s Expectations: 

Direction: Bearish

Target: 2016.52

Invalidation: 1949.95

EURUSD - Daily Timeframe

 EURUSDDaily-0106.png

Similar to the case of Gold, bearish price action on the US Dollar usually implies a bullish price action on EURUSD. Considering, however, the confluences based on the support trendline of the rising channel, the pivot zone as highlighted, the support trendline of the wedge pattern, and finally, the bullish array of the moving averages, I believe we should be seeing some bullish price action on EURUSD shortly.

Analyst’s Expectations: 

Direction: Bullish

Target: 1.08554

Invalidation: 1.06524

GBPUSD - Daily Timeframe

 GBPUSDDaily-0106.png

By now, I’m sure you can already guess my sentiment regarding the direction of GBPUSD. If your guess was ‘bullish,’ you are right! The confluences I have for this sentiment aside from the correlation with the US Dollar price action include; the support trendline, the bullish array of the moving averages, and the rejection from the 100-Day moving average support.

Analyst’s Expectations: 

Direction: Bullish

Target: 1.25942

Invalidation: 1.23275

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.

TRY TRADING NOW

You can access more of such trade ideas and prompt market updates on the telegram channel.

Adetola-Freeman Ogunkunle

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