Economic events and data releases vary in impact, so you’ll want to keep your eye on the economic calendar for mainly high impact (‘red folder’) news whenever possible. High impact news can swing the movement of XAUUSD by up to 300 pips in mere hours, if not minutes.

Example of a data release: 

Jun 2 2023, 8:30AM ET — US Average Hourly Earnings m/m, Non-Farm Employment Change (NFP), Unemployment Rate

Forecast:

• NFP — 193K
• Unemployment Rate — 3.5%

Actual:

• NFP — 339K (more people were employed)
• Unemployment Rate — 3.7% (more unemployed US workers seeking employment)

The MASSIVE increase in the number of non-farm jobs created gave significant strength to the dollar, despite the increase in total work unemployment rate.

Fundamental analysis rule of thumb: 

Productive data release e.g. Average Hourly Earnings, GDP  where actual (for a currency) is… 

• greater than expected? Currency value will go UP
• less than expected? Currency value will go DOWN

Unproductive data release e.g. Unemployment rate data release where actual data is…

• greater than expected? Currency value will go DOWN
• less than expected? Currency value will go UP

As a result, we witnessed these data releases swing gold’s value lower by100 pips in the first 30 minutes, and price continued in that direction for the rest of the market day for roughly 310 pips. 

Ideally, you don’t want to be in a position when high impact news releases due to the incredible price swings — there’s a high chance of slippage, which may mean price closes far beyond your stop loss, which is a larger hit to your capital than your standard risk tolerance. It’s often better to exit a position before this can happen. 

We can take advantage of the greater volume that high impact news brings by allowing the market to settle for around 10-15 minutes after significant news releases. Spreads will have lowered, new ranges will have been defined, and this means all we have to do is wait for our setups and entries to align with price action. 

The extended volume also leaves the market in a position that makes for a great trading environment to leave runner positions (partial positions) instead of closing full at 10-40 pips. We’ve demonstrated this on the livestreams where we have caught 100+ pips through runners — you can catch the live streams here, Mon — Fri from 6:30AM ET.

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