Good morning guys,
My second short trade yesterday was stopped out:
TRADE 2
Entry: .9542
Limit: .9457
Stop Loss: .9561
Status: CLOSED
P/L: B[/B]
I’m not sure if it was GDP that came out, frankly i have no idea, but i didn’t care much since i had set my stop loss, which was very reasonable at 19 pips, with a possible profit of much larger proportions.
For some reason my Daily Trendlines on my chart had dissappeared and i totaly forgot and couldn’t see the ascending trend line, which i was going on about the other day, hence why i was bold and in this case deluded enough to place an ambitious Target of .9457 a whole 20+ pips under the trend line…
I admit that was my bad, but these things happen, if my trend line hadn’t dissappeared on me i would have logically set my Target a few pips above it and i’d be in profit on the second trade now.
Overall yesterday was a very profitable day.
Let’s see how things are looking today.
The fall from .9913 took us as far as .9480, where it met the Daily Ascending Trendline and bounced off taking us back as far as .9668, respecting the previously existent short term trend line which you will notice on the chart i’ve attached.
Our General Bias is long, so we will only be looking for long trades today.
We will consider bearish price action from .9913 to .9480 as a correction of the rally started at .9260 with a High of .9913. Since it is a correction, it is in the opposite direction of the trend, hence… BULLISH.
Trend Determination D1:
*Stochastics are around the 20 area and they seem to be reversing
*RSI is > 50
Rating: Bullish
Trend Determination H4:
*We have a perfect morning star candlestick formation off .9480
*Bullish MA crossover is visible
Rating: Bullish
Targets / R on the Upside In Order of Violation:
- .9668 > 9696 > .9734 > .9913 > 2.000
Targets / S on the Downside In Order of Violation:
- .9625 > 9598 > .9574 > .9480 > .9455 > .9315 > .9260
Play it safe and set your Stop Losses!
I will update more throughout the day
Regards,
E. Lang
GDP
Consider the potentially damaging events of the past six months: a government induced housing market collapse, $4.00 a gallon gasoline prices, the effect on businesses of almost two years of Federal Reserve rate increases, an unresolved and unpopular foreign war and a dramatic and divisive national election. In an economy as heavily dependent on consumer spending as the American, any one of these developments could have seriously undermined consumer sentiment. If consumer sentiment and consequently spending had fallen last fall it is possible that we would today be drifting toward recession. In retrospect, it is understandable why speculative interest turned against the dollar in the last quarter of 2006. With the initial reading on 3rd quarter growth 1.6%, the USD looked set to follow the economy down. Beginning in the week after Christmas, reports on the American housing market, consumer confidence and purchasing managers scored solid and, to many observers, surprising gains. The improvement in US statistics was capped this week by the 4th quarter GDP number which outstripped even the optimistic expectation of 3.1% with a reading of 3.5%. Historically the trend level American economic growth is between 3% and 3.5%. Can the US economy sustain its historical trend in today’s difficult economic and political environment and if so what will that bode for the Dollar?
NFP
In the 4th quarter of 2006 the US economy created an average of 136,000 new jobs per month. The January Non-Farm Payrolls (NFP) due at 8:30 am Friday is anticipated to have added 160,000 jobs. The December the reading was +167,000. January’s estimate is almost two thirds higher than the expectation had been for December, +100,000. The NFP statistic has consistently surprised the market with better than predicted outcomes. Baseline revisions added over 800,000 total jobs in 2006. Last year economists speculated that as the housing market fell it would drag down consumer spending, maybe tipping the US in recession. Consumer spending, however remained strong, supported, I would argue by a buoyant job market. Does the NFP report bear more directly on consumer spending than the housing market and what does that mean for the Dollar?