A Foolish Whim

Before we get to my latest Forex blunder, I'd like to review yesterday's events.

As noted in my previous entry, my returning trade was successful. I got in as price gradually rose higher, met with heavy selling (my selling), and then repeated the cycle again. After the release of the US 2Q GDP data at 8:30 AM, the Sterling went as high as 1.9062. While the 2.9% GDP growth is close to the 3.0% the market expected, the data revealed that the US economy did indeed slow during 2Q, a far cry from the 1Q growth around 5%. A weaker US economy means a weaker dollar, so folks bought up the Sterling.

The pair hovered between 1.9030 and 1.9060 before running out of steam just shy of 1.9100 at 1.9093. I've often heard that support/resistance lies at the double zeros; I believe that came into play here. Shortly after stalling out, US personal spending data came out stronger than was anticipated, and this sent the Cable plummeting to test 1.9000. I guess news of the dollar's demise was greatly exaggerated, leading traders to sell the Cable. It rebounded to hover between 1.9050 and 1.9030.

It is at this point that our genius trader decided to short the Cable again in an effort to repeat yesterday's success. Nevermind that the level I previously targeting as resistance had become support since the Cable's rise, I shorted and lost 20 pips. It was also an after-hours trade, something I rarely do.



What's on tap for tomorrow, the first of September? We've got Non-Farm payrolls coming out at 8:30 AM. The market expects 125K, and the folks at Briefing.com are expecting 120K. A lower number would indicate the US economy is indeed becoming sluggish, perhaps prompting the FOMC to refrain from an interest rate hike in their next meeting September 20th.

I have the day off tomorrow (just had to stretch that 3-day holiday weekend into 4), so if I get up early enough, I may try to play the news. If employment comes in significantly lower than expected, I'll be buying the Cable. Other than that though, I'm going to be putting a buy limit order in at 1.9024, except I'm expanding my order to 30 pips for S/L and T/P; I want to make sure that the trade survives a minor incursion below 1.9000. On the upside, I'll end up near where price idled today.

Here we go...

A Winner

Yesterday's trade was a winner. I would elaborate more, but it is WAAAAAAAY past my bedtime. More to come tomorrow.

Back From the Forex Dead

Okay, I really mean it this time.

I'm back.

I've missed quite a bit in my absence, from the cessation of the Fed's seemingly relentless interest rate hike campaign to crude's rise on fears of political instability in (where else?) the Middle East to crude's latest trip below 70$ a barrel. Rather than spend an inordinate amount of time on getting caught up on the goings on, I'm just plunging right back into it.

US Consumer Confidence data was released today, and apparently, US consumers have NO confidence. The lower than expected 99.6 for August is the lowest since last November. This sent the GBP/USD pair 100 pips lower before the release of the minutes from the Fed's August 8th meeting sent 100 pips higher again, back to where it began the day.



Tomorrow sees the release of premliminary Q2 GDP at 0830 EST, with the market expecting 3.0% growth. The people at 4Cast don't see the Cable doing much tomorrow, maybe even slipping a little. I agree, seeing that the Sterling is near the 100% Fib retracement of the early April low. I'm putting an order in to sell if the pair hits 1.9022, with a take-profit of 1.9002 and a stop-loss of 1.9042.



Here's hoping for a successful return.