In today’s live trading session, we determined the bias for many of the major and minor currency pairs. This was achieved by first analyzing the US Dollar Index (DXY) and then looking at the rest of the Forex pairs.
After analyzing the US Dollar Index, it was clear that the downtrend for the index was still valid and true. The next target is 96.00. Based on this, we are bullish for most of the majors. As far as technical analysis goes, EURUSD, AUDUSD, and NZDUSD should continue to rise. GBPUSD is stuck in a tough spot, but we are leaning towards a bullish bias. As for USDCAD, this pair has just completed a head-and-shoulders pattern, and all that is left is for the pair to break its neckline.
Later in the session, we went over the COT Report. The COT report which is released by the Commodities Futures Trading Committee (CFTC) gives traders an insight into the long and short positions held by commercial traders (companies), non-commercial traders (institutions), and non-reportable traders (small traders). Based on this week’s report, the Euro is very bullish, the USD is very bearish and the Pound, Aussie and New Zealand Dollar are neutral. We will use this report in conjunction with our technical analysis to determine which trades would be entered.
It seems that as the weeks go by, the majors and minors correlation has become virtually 1:1. This is good for us traders as a winning trade for EURUSD might mean a winning trade for EURJPY. This week we have the monetary policy statements for the Loonie, the Yen, and the Euro. There shouldn’t be any surprises, but you never know. As always, be safe and trade responsibly!
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