Good morning, Traders!
Yesterday’s strong USD move should not be a surprise as many instruments were due for a correction. Today though, will see if the dollar’s overall weakening trend is still intact.
There may be little movement until the U.S. session kicks off around 1:30pm UK time.
My trading plan is still intact for the time being. Below are a couple of items I’m anticipating opportunities on.
Here are my market picks for today:
XAUUSD (Gold), 1-hour, bullish
The 1hr Gold chart is currently retracing down and testing support of the old (prior/recent) highs.
The 4-hour timeframe is in a downtrend, while the Daily is in an uptrend, and so I am watching the 1-hour for a confirmation of a change of trend either in line with the 4-hour or Daily.
There is a good chance that Gold will break higher allowing for an entry on the break of a new high on the 1-hour chart around 1776.25
With a stop-loss below the recent low on this chart, this could provide a healthy reward:risk trade should price decide to head back up to the highs circa 1805.
However, should price NOT break above the recent high, and instead break lower, then the likely outcome for the day is that the USD maintains its hold for another day.
Traders who take partial profits when price reaches 1:1 often enjoy few losses.
S&P500, 1-hour, bullish
The overall Daily uptrend is healthy, and consistent, if a little over-extended.
Similar to the Gold setup above, I’m waiting for price to create a fresh high on the 1-hour, which should provide a high-probability entry should price return to its highs again. (This will also be impacted by the USD’s moves today)
I’m now looking for a continuation of this bullish momentum to the upside.
As with Gold above, traders could place their stop-loss below the recent low, only a few candles away, which then creates a good reward-to-risk setup.
Taking partial-profits at 1:1 is a great way to mitigate risk, as well as targeting a realistic price point, such as a major resistance level, or 1:3 risk-to-reward point.