Hello Traders,
Of course the focus last week was the NFP and while data didn’t disappoint, beating expectations and printing above the 200K mark, that figure-222K- was important to us. Most importantly is the likely indication that this data was pointers of a shift towards upbeat macro-economic statistics in the second half of the year. From the start of the year, it was evident that almost all the records out of the US were underperforming expectations and keeping the metrics of inflation, housing, real demand and employment in focus, investors were mostly disappointed. As we can see, employment has been on a downward spiral despite some positivity the recent NFP brings. When we observe the trends, employment topped at 2.0% in Q4 2016 and decelerated to the current 1.6% level mostly driven by a decrease in part time jobs and a considerable rise of full time employment which is at the all-time highs by the way. Average hourly earnings on the other hand was higher at 2.5% YoY and up 0.2% in June. This figure sustained the strong uptrend which indicates demand for new workers and by extension a possibility of real demand and investment being jerked higher as wages improve. Overly, despite the Fed raising interest rates, employment looks solid and indicates that it is almost at full employment. This week, our main focus will be on inflation. So far, it has been growing at a slow pace that anticipated but still it remains consistent and is edging up towards the 2% Fed target.
In this case therefore, I’m trading the USDCHF and I’m a USD bull. So far, the 200 period moving average is acting as a reliable support soaking up sell pressure where price action is rebounding strongly. Stochastics are also turning from the oversold territory and as the week closed, a double bar candlestick reversal pattern was formed. This is likely to be confirmed this week especially if inflation data turns out to be positive and above expectation. Entry is in the 1Hr char and so far, price action is trending higher and bouncing from the 61.8 Fibonacci level drawn from Friday’s Hi-Lo.
Trade as follows:
Intraday traders
Buy: 0.9645
Stop Loss: 0.9615
Take Profit: 0.9695
Swing/Trend traders
Buy: 0.9645
Stop Loss: 0.9615
Take Profit: 0.9925
Have a good trading day

USDCHF 1HR chart-10.07.2017

Source: Dalmas Ngetich

USDCHF weekly chart-10.07.2017

Source: Dalmas Ngetich

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.