Building a Trading Model for Price Action Trading

Gold is bouncing off monthly lows near the $4,400 region per troy ounce on Monday. The broader downtrend remains in place, with pressure coming from a firmer US Dollar following Kevin Warsh’s nomination as the next Fed chair.

EUR/USD now comes under further selling pressure, slipping back to the area of daily lows near 1.1840 on Monday. The pair’s daily pullback comes on the back of the continuation of the rebound in the US Dollar as investors keep assessing the “Warsh” trade. Moving forward, markets’ attention is expected to be on the release of the US ISM Manufacturing.

GBP/USD faces some increasing selling pressure, building on recent losses and revisiting the 1.3670 zone at the beginning of the week. Cable’s decline comes in response to the persistent advance in the Greenback while traders have started to shift their focus to the upcoming BoE event.

Bitcoin consolidates above $77,000 after plummeting and testing April’s tariff-triggered lows, as investors remain cautious. Ethereum extends losses toward the psychological $2,000 support amid ETF outflows. XRP holds below its April low at $1.61 as futures Open Interest drops to $2.81 billion.

The first full month of the year is behind us, and, honestly, it has been rather more dramatic than most had anticipated when toasting the New Year. We wrapped up last week with US President Donald Trump announcing his Fed Chair pick. 

Gold and Silver start the new week under heavy selling pressure after suffering huge losses on Friday. The US economic calendar will feature the Institute for ISM Manufacturing PMI report for January later in the day and investors will keep a close eye on comments from Fed policymakers.