A1 Trading Company

April 20, 2023

Higher Jobless Claims Sends USD Lower, JP225 Takes Off

Frank Cabibi

The dollar sank this morning as jobless claims came in higher than expected at 245K new claims this week. Last week's report was slightly lower at 240K. This earnings season is mixed as Tesla reported weaker profit margins. USD is also looking weak with poor economic data continuing to roll out.

EdgeFinder Analysis

USDJPY has been on a steady uptrend for the past 4 weeks despite a dollar decline and volatile S&P. The EdgeFinder still puts this pair at a +5 buy with seasonality and trend reading pointing to the upside. The advantage of trading dollar-yen is its correlation to both the dollar and stock market. Dollar strength and stock strength are both good for this pair.

Retail sentiment is still showing a neutral score on the scanner although there is a slight lean to the short side on this pair. The next 3 months have historically been positive on a 10-year average, and so far, the gains have been overall trending upward since the beginning of the year.

EURJPY is another potential play to the long side. This is partly due to smart money showing heavy buy interest in the euro as well as short interest in the yen. This pair is also scored at +5 on the EdgeFinder. EUR fundamental are not as strong as technicals when comparing the two currencies. It's hard to beat Japan in inflation as they carry a negative interest rate. However, the Euro-area is likely subject to a higher economic growth potential than Japan.

On the 1D timeframe, price is pulling back after testing a previous high around the $148s. If a double top is established, we could see a test down towards the $145s. If we see a break however, there could be enough momentum to take price higher towards the $149s.

The Japanese stock market index is one of the strongest scores on the EdgeFinder as well. At a +5 buy rating, most metrics point in the index's favor versus the yen. Seasonality is historically bullish for the market as the trend reading is also plotting a fairly steep projection for the next seven days.

Retail is largely short in the stock market, but smart money is long. Institutions are also short yen. Seasonality is bullish for the next 4 months. Investors may interpret the recent jobless claims as a less hawkish Fed going into May. This could also be bullish for JP225 as the Japanese market index mirrors a lot of the SPX's moves.

Retail Spotlight

The crowd is heavy long kiwi as those currencies are performing the worst today. GBP looks mixed as well as the EUR. It seems like most retail traders are mixed USD too. The crowd's longest on NZDCHF, AUDCHF and EURCHF. They are also mostly short USDZAR, AUDNZD and EURNZD.

Smart Money Spotlight

Just reiterating from Tuesday's report, commodities are the most bought assets on the Smart Money Tracker. The top 3 most bought assets on here are USOil, gold and EUR. It also seems institutions are just as confused when it comes to most of these assets. The most shorted assets are JPY, CAD and CHF.

Fundamental Spotlight

A new format on the Fed Tracker helps make reading the interest and inflation forecasts a little easier. According to these projections, the Fed does not plan to cut back on the interest rate until 2024. It seems like 5.25% is the highest the rate will go, as long as it brings inflation down to the 2% target in the time in which the Fed plans.

A1 Edgefinder

AI- Generated Trading Setups
AI-generated bullish/bearish bias setups on forex currencies, gold, & indices.

Discount code: 'READER'

Access Now


Trading Plan Template
Struggling to build a successful trading plan? Download our template to get started today!
Expecting A Pullback

Today's economic figures came out in US and Canada. GDP came in higher than expected in Canada while the price of goods purchased by consumers was lower than last month. Here are some pullback ideas for USD and CAD from GDP and PCE numbers. EdgeFinder Analysis NAS100 is a bullish reading on the EdgeFinder still. […]

Read More
Traders Wait For More Inflation Data

This week has brought more inflation data with it regarding the USD's PCE and PMI numbers. Powell is also set to speak this Friday about monetary policy going forward. The RBNZ will also release their latest interest rate news tomorrow with expectations of an unchanged rate at 5.5%. EdgeFinder Analysis GBPUSD is a bullish bias […]

Read More
Trading Into PMI Data on EUR, GBP and USD

This week is a big PMI week for Europe, UK and US. Additional inflationary metrics will add to the overall sentiment of these countries' monetary policies going forward. Here are some setups for the coming week on these currencies. EdgeFinder Analysis GBPCAD is now a +7 on the EdgeFinder as we wait for CPI news […]

Read More
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
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.
homesmartphonelaptop-phonecrossmenu linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram