This Week’s Economic Calendar
The recently concluded week once again in the DXY has provided clean price action, offering smooth low-resistance liquidity runs to clear one-sided objectives. However, the indexes remained within the range, resulting in high resistance trading intra-day. As we discussed, we will continue to trust buy models at all-time highs until they prove ineffective while watching for specific signatures that would constitute a market reversal and intermediate-term high.
The new week brings forth important reports, with NFP Reports on Friday taking the spotlight, emphasizing the need for meticulous trading and tight risk management.
Please note that this is not financial advice.*
Monday:
Given that it’s the first day of the NFP (Non-Farm Payrolls) week, a new month coupled with a Monday, it’s crucial to exercise patience and manage expectations. The recommendation is to wait for the 9:30 opening and then focus on identifying the most probable higher timeframe draw on liquidity at 10 am, coinciding with the red folder news driver simultaneously.
Tuesday:
Red and medium folder drivers are scheduled for 10 am and 12 noon, which are expected to inject volatility into the markets. Consequently, the day is anticipated to present optimal trading opportunities. It will be ideal for traders to consider the 10-11 am Silver Bullet session and the pm session for higher probability trades.
Wednesday:
Red and medium folder news drivers are expected to flood the market in the AM session, starting as early as 8:15 AM. These news events will likely serve as volatility injections into the markets. However, it’s important to note that Fed Chair Powell will be speaking by 12 noon, likely leading to consolidations up to his speech. During his speech, there may be times of volatility and whipsaws in the market. Traders are advised to heavily manage their expectations on this day and focus on the 7-8 AM kill zone or the PM session if they have the experience to navigate this day professionally.
Thursday:
Highlighted as the day before the Non-Farm Payrolls (NFP) report, it tends to exhibit high resistance and low probability. Traders are advised to exercise caution, particularly if they lack experience. On this day, there are medium and red folder news drivers scheduled between 8:30 AM and 2 PM, which are expected to inject volatility into the marketplace. If traders opt to participate on this day, they should recognize that it’s a lower probability trading day.
Friday:
Marked by the anticipation of the Non-Farm Payrolls (NFP) numbers, there is an expectation of heightened volatility in the markets following the release of this high-impact news, potentially offering optimal trading opportunities. However, it’s important to note that trading ahead of such high-impact news is not recommended due to increased uncertainty and risk. Instead, traders are advised to wait and observe the liquidity and inefficiencies that unfold after the news release. For higher probability setups, consideration can be given to trading during the 10-11 AM Silver Bullet or the PM session.
Earnings Spotlight: Major Corporate Reports Unveiling This Week – Key Insights for Investors
The Cot Report For The US Dollar
The previous week we witnessed an expansion intra-week, supported by discount PD arrays being displaced away from. Analysis of the Commitments of Traders (COT) report, focusing on commercials engaged in hedging activities, reveals that commercials maintain a net long position. The data released on Friday reaffirms that commercial entities, including institutions and hedgers, continue to hold more long than short positions in the market, indicating anticipation of higher prices in the longer term.
What does this signify for us as traders? The commercials whose positions we track continue to maintain a bullish outlook on the US dollar, a sentiment also reflected in the price action observed on the chart. However, to sustain this bullish momentum, we must trade above the weekly fair value gap C.E. finding support, thereby displacing to the upside and reinforcing the bullish bias further. The US dollar will remain bullish until the prevailing price action proves otherwise.
Stay informed for sound decision-making, and always adhere to strict risk management protocols.
Until our next update, trade wisely.
Happy Trading!
Adora Trading Team
