Before you jump into your trading week, you always want to make sure that you’re analyzing appropriately. In this video, I want to show you exactly how I analyze the upcoming week at the end of the previous week. This is something that I’ve done very routinely in my more active trading days. Now that I’m also starting to trade manually, I am back at analyzing every single week to make sure that I’m staying in front of potential swings that could happen in the market.
If you’ve watched these videos or know my journey, I have done this for many years and have predicted numerous hundred, if not thousand, pip swings that are still relevant to this day. I picked up the skill of trading back in 2014-2015 and have never stopped since. So, if you want to see how I approach the markets, let’s jump right in.
Welcome here to the channel. My name is Matt Jimenez. I’m an entrepreneur who has worked with the greatest minds in finance over the last several years, and I’m here to impart to you guys everything that they imparted to me. In this video, let’s go ahead and address the upcoming foreign exchange markets.
Now, what I have up on my screen is Forex Factory, and typically, I like to look at this before I engage with anything in the market. I want to see what upcoming news releases could potentially influence a currency and cause massive swings in the market. You want to make sure that you’re on the right side of the trade or not in any trade at all.
Looking at Monday, the biggest thing that stands out here is the CPI. CPI is a very important metric when it comes to measuring inflation, and the forecast is 0.1%. Previously, it was negative 0.1%. If you don’t know how to read this, you have the actual, the forecasted, and the previous. The previous is what it was, obviously, prior to the news release. What they’re forecasting, as I said, is 0.1%, and then the actual is what it actually comes back as—what the data is saying.
So, if they hit their number, this will be bullish for the Euro, meaning it will cause some strength in the Euro. In fact, I have already seen a bit of Euro strength playing out. A lot of the times, with news, the move already starts to happen prior to its release, and the release causes a more exacerbated move. So, if we do come back at this percent, I do anticipate some Euro strength.
We also have some other important news releases for the US dollar, which include a Jerome Powell speech. With speeches, it’s very hard to predict what’s going to happen because there is no previous, no forecasted, and no actual. It’s strictly based off sentiment, and you don’t know what they’re going to say.
Typically, with these speeches, you want to look for any statements of them being dovish or hawkish. Dovish policy makers are more likely to support measures that stimulate economic growth, such as lowering interest rates or implementing quantitative easing. These are all things meant to stimulate the economy.
On the other hand, hawkish would be the complete opposite, meaning tighter monetary policies and higher rates. If the speech comes back dovish, which I am anticipating long-term for the US dollar, I think this next talk will be a little bit less dovish and a bit more hawkish. This is because the last previous talks that we had were very dovish on our currency. In fact, there were multiple rate cuts that just happened, and I think that this one, while yes, the overall theme is dovish and they’re going to continue loosening monetary policies and cutting rates and trying to do whatever they could to cause stimulation in the economy. I think that this one will come back with a little bit of US strength, and in just a moment, we’ll look at the charts to see if that makes any sense.
Now, on Tuesday for the Euro, again, we have some more important news. This is the core CPI. When it’s “core,” that means they’re extracting certain data that go into everyday spending to help measure the everyday expenses of people, overall gauging where inflation is at. The forecast is 2.7%. Now, if this comes back on target, this will be good for the currency, meaning there will be Euro strength.
Another CPI estimate is coming out, but this one is not core, so it’s including everything, not excluding things. Then, we have some big news coming out for the US dollar, which is the PMI. If you don’t know what this means, you can click the little folder and you’ll have a dropdown below. On the far left, it’ll say “measures,” and it will tell you exactly what this news release is. The PMI is a level of diffusion index based on surveyed purchasing managers in the manufacturing industry.
We also have some job news releases, which have definitely caused a bit of volatility in the US dollar. This release shows the number of job openings during the reported month, excluding the farming industry.
On Wednesday, we have the non-farm payroll, which happens every single month and is very important to keep in mind for your portfolio. The non-farm payroll is typically the most volatile news release that can come out.
Scrolling down now, for the Franc, we have another CPI, which measures inflation. They are forecasting a negative figure, and the previous was zero. So, if they hit their target, that will be bullish for the currency, and if not, it will be bearish.
Scrolling down a bit more, on Thursday, we have unemployment claims, which is very important and can definitely cause a ton of volatility in the markets. We tend to look at a lot of job claims because it shows how the labor force is doing, and it also indicates how well our economy is doing to a degree.
This specific unemployment claims release shows the number of individuals who filed for unemployment insurance for the first time during the past week. If we see an uptick in these numbers, obviously, that means more people are losing jobs and are looking for some type of compensation, which would not be good. Why? Because who’s going to have to pay for that? Taxpayers. And where is that money coming from? Everyday people like you and me. And who’s taking it from us? The government, to allocate to people who are losing their jobs.
So, every single month, on the first Friday of the month, there is NFP, which is one of the most volatile news releases to come out…
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