A1 Trading

Covering BoE and US Jobs Data

February 1, 2024
Frank Cabibi

Rates stayed the same in the UK, as expected. US unemployment claims came in hotter than expected with lower ADP NFP yesterday and NFP tomorrow. Here are some trade ideas for the pound and dollar around BoE sentiment and US jobs data this week:

EdgeFinder Analysis

GBPAUD is the strongest bullish reading on the EdgeFinder as of now. At +9, almost all categories point to a stronger pound over the Aussie. The pair has been on a strong uptrend since the start of the year and may continue to rise after the recent Bank of England meeting.

The bank's policy is similar to the Fed's in that they aspire to reach the 2% target on inflation, and they expect their economy to see some growth in the coming quarters. Price and wage inflation are falling, but they are adamant about keeping levels restrictive for some time until their goal is reached.

Gold looks good after these jobs data that have already come out this week. ADP came in lower and unemployment claims came in hotter. Gold tends to react positively to poor economic news in the US which is what is happening now. Should NFP be lower, the metal will likely find more strength to the upside.

The 1D timeframe shows a breakout of the wedge and a few attempts to move higher. The past three days have only shown minimal gains, however. As long as price cane stay above the wedge pattern, we might be able to see the metal come up to test the $2,060s.

Oil saw a heavy change to the bullish side today as it now sits at a +7, increasing the score by 4 points. The changes occurred in seasonality and interest rates. The month of February is historically expected to gain around 2% on a 10-year average.

Interest rates have changed the score by 2 points as the US02Y (2 year bond yield) crossed below its 8-day moving average, indicating weaker interest rate sentiment. As we approach NFP tomorrow, the commodity would like to see a better jobs number than expected in order to strengthen its bullishness.

Retail Spotlight

The contrarian signal on oil right now is from retail sentiment which is majority long on this commodity, so the EdgeFinder checks this as a bearish sign. It still seems that the pound is shorted by the crowd while AUD and NZD are being bought.

Smart Money Spotlight

USOil is seeing a potential convergence between retail and smart money sentiment. Ideally, the EdgeFinder would like to see an increase in shorts on the oil market from retail while COT net positioning increases to the long side to be bullish.

Fundamental Spotlight

US jobless claims data came in higher than expected at 214K more claims this week. On top of this, we saw a fall in ADP NFP on Wednesday. Worse labor numbers could be a weak signal for USD and oil, while being a bullish sign for indices and gold. But we still have to wait for NFP tomorrow.

The EdgeFinder

All-in-one Fundamental Dashboard

30 Days Access

Free Telegram

Join for daily analysis and trade setups!

Join Telegram

DISCLAIMER: All comments made by TraderNick’s Forex Group, LLC are for educational and informational purposes only. All comments should not be construed as investment advice regarding the purchase or sale of any securities or financial instrument of any kind. Please consult with your financial adviser before making an investment decision regarding any securities or financial instruments mentioned by TraderNick’s Forex Group, LLC. TraderNick’s Forex Group, LLC assumes no responsibility for your trading and investment results. All information on any of the platforms utilized by TraderNick’s Forex Group, LLC was obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. TraderNick’s Forex Group, LLC, its employees, representatives, and affiliated individuals may have a position or effect transactions in the securities and financial instruments herein and or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies. Trading of any type involves very high risk and may not be suitable for all investors. TraderNick’s Forex Group, LLC, its subsidiaries and all affiliated individuals assume no responsibility for your trading and investment result. Read our full disclaimer here

A1 Trading Company

A1 Trading is a leading financial analysis and trading education company dedicated to empowering traders of all levels. Our team combines extensive market knowledge with cutting-edge technology to provide valuable insights and tools for traders worldwide.
2024 All Rights Reserved | A1 Trading Company
There is a significant degree of risk involved in trading securities. With respect to foreign exchange trading, there is considerable risk exposure, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or currency pair. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading in CFDs. You should consider whether you can afford to take the high risk of losing your money.
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram