[Week 39 - 2022] Trades Recap and Trade Setups
Updated: 3 days ago
The FOMC release last week caused a huge panic in the market as the FED indicated higher interest number in the dot plan. The market now has the growing belief that the FED will tighten the economy into a recession. Market turned risk off with the Dollar (USD) closing off the week at a new high while stocks and major indices down sharply.
With the strong Dollar (USD), the Euro (EUR) is now below parity and the Pound (GBP) is the next in line as it decline in strength sharply, closing off the week below 1.1 (GBP/USD) since 1985. Japan officials also confirmed intervention of the FX market but to little avail. Commodities are also down for the week. Soft commodities trader should note grains quarterly stock report will be released on the 30th September.
Upcoming Economic Release:
The S&P500 and other major indices reentered the bear market, closing off the week at the recent low. Price is now extended and we can potentially see some retracement next week. However with the strong negative sentiments in the market, a breakout confirmation of the recent low can fuel more risk off activities.
Dollar Index (DXY)
The United States Dollar slipped to minor support level at 110.6 region after confirmation of Japan Yen intervention. However, the strength of the Dollar persist as it maintain strong bid, reversing from the support and continues its strength, closing of the week at a new high.
Spot Gold (XAU/USD)
Gold against the Dollar (XAUUSD) closed the week below key support region, breaking below the weekly 200 simple moving average (SMA) and key support region. As mentioned in last week post, a break of these key levels will lead Gold into a bearish market in the long term.
In the 4-hour timeframe, Gold continued its bearish momentum as it stays below the 50 exponential moving average (EMA). In last week post, we also mentioned that price is extended and will return back to the mean level at the 50 EMA and the price action of Gold did exactly as what we mentioned. Gold price reversed upon reaching the key resistance level and the 50 EMA and broke out of the consolidation towards the downside.
Trade Analysis / Setups
GBP/JPY (Analysis 39-1)
Analysis: Price is overextended where we believe price will begin to trade sideways or begin reversal. Anticipation of sideways ceiling is set at 157.45 region where we will also set it as our initial Take Profit level.
Long opportunity: At market reopen towards 157.477 as Take Profit - 1 level as High Risk Trade.
Cheers to all our member who managed to pack some profits this trading week.
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