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Thanks to a busy U.S. calendar full of jobs updates & Fed speak, our strategists focused mainly on Dollar pairs.
Out of seven discussions, two saw both fundie & technical arguments triggered to become potential candidates for risk management ideas. Check out our reviews to see what happened!
Watchlists are price outlook & strategy discussions supported by both fundamental & technical analysis, a crucial step of a high quality discretionary trade idea before working on a risk & trade management plan.
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USD/CHF 1-hour Forex Chart by TradingView
On Monday, our main target catalyst was the upcoming ISM U.S. Manufacturing PMI update, which was likely to prompt volatility in the Greenback and broad market sentiment.
Our target fundamental and price scenario was if the ISM U.S. manufacturing came in net positive AND USD/CHF broke above the tight consolidation pattern around the Fibs, those scenario triggers may draw in net buyers. If this scenario played out, we thought a move to R1 Pivot resistance was a possibility given its daily ATR of around 50 pips.
Both fundamental and technical scenarios played out on this discussion, leading to a swift move not only to the R1 Pivot resistance area, but also nearly testing the 0.9100 major psychological level.
This discussion was arguably effective at leading to a positive outcome with little risk management complexity initially, but a more active risk management approach would have been required give the slew of major U.S. data updates that were still to come.
The rest of the week for the U.S. dollar became even more volatile as ISM Services PMI came in net weaker than expected, followed by hawkish Fed speak, geopolitical catalysts, and a better than expected U.S. Non-farm Payrolls report.
AUD/USD 1-hour Forex Chart by TradingView
On Wednesday we saw our second discussion where both the targeted fundamental and technical scenarios were triggered.
We were watching AUD/USD ahead of the ADP Private Payrolls and ISM Services PMI data, with a target fundamental scenario of potentially weaker than expected outcomes.
We thought that if that scenario played out AND AUD/USD broke above the falling ‘highs’ trendline pattern, we thought that pair of catalysts could potentially draw in buyers into AUD/USD and take the pair to the R1 Pivot resistance area.
Well, the ISM Services PMI was pretty volatile as it came in weaker than expected, with the prices index falling -5.2 to 53.4, the employment index in contractionary territory at 48.5, and the headline number coming in both forecast and previous at 51.4.
This set off a big bearish USD move, pushing AUD/USD to break the falling trendline and testing the R1 pivot resistance area almost immediately.
This was just the beginning of the move as AUD/USD rallied will over one daily ATR from there to break above the 0.6600 psychological handle before the move stabilized the following day.
With a simple straight shot higher, it’s highly likely this discussion was supportive of a positive outcome with little risk management complexity needed.
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