A reason why you should mix TA and macro analysis... $GBPUSDHey.
The chart above provides the perfect reasoning as to why purely looking at price action around market sensitive data points can be your undoing.
On Friday we had the NFP number - this was a big beat.
However, GBPUSD didn't really move to the downside all that much.
This likely led to many getting long, lulled into a false sense of security going into the New York trading session.
I'd argue that many seeing the textbook bullish engulfing candle got excited - but the probability of upside is likely not in your favour after such a large beat on a key data point!
After all, orderflow is determined by the interpretation of macroeconomic variables. You can read more about this here: (www.imf.org)
This is one of those situations where one has to look away from charts and look at the realities of the data - a market hasn't yet made its move on a massive data drop at a time when the Fed are deliberating about cutting rates and you want to get long?
No worries, I'll happily take the other side there!
It's vital to always keep a macro picture in your head, and add and take away from your view with little bits of information that we're hit with each day, because I guarantee that this will help your trading massively!
