Welcome to another live trading session. In today’s session, we discussed the severe impact that the black swan event Coronavirus has had on the Forex markets and how we will trade moving forward.
During this week’s market open many traders and investors were alarmed to see major gaps on the charts. Over the weekend, the severity of the Coronavirus grew as numbers in the West have increased. For example, GBPAUD and GBPNZD have spiked 1000 pips to the upside. We saw US Oil (Crude) drop to $30 per barrel. We also saw XAUUSD (Gold) spike all the way to 1700. Mind you, we have a long term target of 1800.
After this weekend, many traders are left to make sense of what has occurred and how to trade moving forward. We have elected to take the same approach as last week, and that is to ease into the trading week. We will give all the major banks around the world time to digest the surge in Coronavirus cases before entering a trade. We did find potential setups for USDCHF and GBPJPY, and hopefully for us, these two setups will be available to enter later today.
We are in a once in a lifetime situation as the Coronavirus has gotten to the point of possibly causing a global recession. We should see members of all the world banks continue to work together to prevent such an event from happening. As traders, our job is to trade with the market and where it is expected to go. We should expect further safe-haven dominance until the situation is controlled. As always, be safe and trade responsibly.
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Check Friday’s Blog Post: March 6th, 2020