Global employment updates, easing Middle East tensions, and the latest Fed statement were the biggest drivers this week, prompting our strategists to focus mainly on the Greenback and Comdolls.
Out of six discussions, only two scenario/price outlook forecasts saw both fundie & technical arguments triggered to become a potential candidate for a risk management overlay. Check out our review on that discussion to see what happened!
Watchlists are price outlook & strategy discussions supported by both fundamental & technical analysis, a crucial step towards creating a high quality discretionary trade idea before working on a risk & trade management plan.
If you’d like to follow our “Watchlist” picks right when they are published throughout the week, you can subscribe to BabyPips Premium.
AUD/NZD: Tuesday – April 30, 2024
AUD/NZD 1-hour Forex Chart by TradingView
On Tuesday , our strategists focused on potential volatility from the upcoming New Zealand employment update, and in this particular scenario, we thought that if NZ jobs came in net weaker-than-expected, it could help push the uptrend in AUD/NZD higher.
Our strategy was to see if the Fibonacci area would be tested and held after that particular fundamental outcome, and if so, technical buyers may jump on the trend from there.
That scenario did play out as New Zealand reported a net jobs loss in Q1 2024 and a rise in the unemployment rate; we also saw labor costs fall as well. Overall, this was a fundamental trigger that supported our long bias on AUD/NZD.
AUD/NZD immediately popped on the event, but there were two pullbacks to the 38% Fibonacci retracement area (not quite our 50% to 61% target entry area) that were technical opportunities to play the uptrend at better prices.
For those who overlaid a long risk management plan there and took profit around our target area (around the previous swing high of 1.1014), they highly likely saw a net positive outcome on this discussion.
NZD/USD: Wednesday – May 1, 2024
NZD/USD 2-hour Forex Chart by TradingView
On Wednesday, our strategists saw NZD/USD testing a major support area, and with the FOMC monetary policy statement right around the corner, we thought that if there wasn’t a strong hawkish tone from Fed Chair Powell and gang, the support area could hold and draw in a strong bearish USD reaction.
Later in the day, the FOMC held interest rates as expected in their latest statement, looking for greater confidence that inflation is moving sustainably to target before cutting interest rates.
The bigger mover though for USD and bond yields was Powell’s comments that signaled a rate hike was unlikely, disappointing traders who may have thought recent sticky inflation reads from the U.S. could have had opened up the possibility of interest rates moving higher.
Our fundamental qualifier was triggered, and with NZD/USD immediately bouncing from the support area, the technical qualifier was triggered as well.
From the event bar, NZD/USD proceeded to move 110 pips higher through the rest of the week, with the help at the end from the weaker-than-expected U.S. employment situation update. For those who overlayed a long risk position right after the event and held for the rest of the week, it was highly likely they saw a net positive outcome.
Too tired or lazy to journal? Check out TRADEZELLA! It’s an easy-to-use analytics & journaling tool that can lead to valuable performance & strategy insights! The app also features tools like trade replay & backtesting to help improve performance and sidestep avoidable mistakes. Click here to see if it’s right for you!
Disclaimer: Babypips.com earns a commission from any signups through our affiliate link. When you subscribe to a service using our affiliate links, this helps us to maintain and improve our content, a lot of which is free and accessible to everyone–including the School of Pipsology! We appreciate your support and hope that you find our content and services helpful. Thank you!
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.