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...
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...
posted by Young Pip at 11:44 PM
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